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HMRC internal manual

Film Production Company Manual

From
HM Revenue & Customs
Updated
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Calculation: rates of relief

CTA2009/S1200 & 1202

Where a film production company (FPC) is entitled to claim Film Tax Relief (FTR) in respect of enhanceable expenditure (FPC55020) the rates of both the enhancement and any payable credit are determined by the level of total core expenditure incurred by the FPC.

Limited-budget films (one with total core expenditure of £20m or less: FPC10160) enjoy higher rates than others (those whose core expenditure is over £20m).

  Limited-budget films Other films
     
Rate of enhancement 100% 80%
Payable credit rate 25% 20%

FTR will be most valuable where the film is profitable and the FPC uses the additional deduction against income. The table below shows the value of the FTR assuming in each case that:

  • at least 80% of the total core expenditure is UK core expenditure and
  • the rate of corporation tax is 28%.
  Limited-budget film Other films
     
FPC with sufficient taxable profits to absorb all of additional deduction Enhanceable expenditure = 80% of total expenditure  

Rate of enhancement = 100%

Value of FTR:

= 80% x 100% x 28%

= 22.4% 

  Enhanceable expenditure = 80% of total expenditure

Rate of enhancement = 80%

Value of FTR:

= 80% x 80% x 28%

= 17.9% 

     
  FPC has no taxable profits and claims maximum amount of payable credit Enhanceable expenditure = 80% of total expenditure

Rate of enhancement = 100%

Payable credit rate = 25%

Value of FTR:

= 80% x 100% x 25%

= 20% 

  Enhanceable expenditure = 80% of total expenditure

Rate of enhancement = 100%

Payable credit rate = 20%

Value of FTR:

= 80% x 100% x 20%

= 16%