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HMRC internal manual

Film Production Company Manual

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HM Revenue & Customs
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Claims: details to be provided

Single-period productions

Most films in respect of which the film production company (FPC) is entitled to claim Film Tax Relief (FTR) will be completed within a single accounting period. The claim will be made after completion, and the FPC should generally possess final information on the film’s budget, its British status and the extent of UK core expenditure which it must supply with its tax return form.

The company should supply the following additional information with its tax return form:

  • the title of the film in respect of which relief is being claimed;
  • a final certificate from the Department for Culture, Media and Sport (DCMS), showing that the film is British (FPC40030);
  • the DCMS reference number, if known
  • final statements of the amounts of:

    • total core expenditure (FPC50010) on the film (whether by the FPC or other parties to its production),
    • core expenditure by the FPC (or, in the case of a co-production, by all the co-producers) on the film that is UK expenditure in order to demonstrate that the minimum UK expenditure condition (FPC40040) has been met and (where relevant) that the film is a limited-budget film (FPC10160)
  • the amount of additional deduction claimed (FPC55020); and,
  • the amount, if any, of loss surrendered for payable credit (FPC55100).

This is part of the normal self assessment process, and although the FPC is required to keep adequate records to support its return, it is not specifically required to provide audited figures.

It will assist the processing of claims if FPCs could also include:

  • A breakdown of the expenditure on film-making activities. The level of appropriate detail will depend on the size of the budget. Generally the headings adopted by the production accountant are adequate. The Film Tax Credit Unit (contact details at FPC10020) can provide further advice if needed.
  • An analysis of that expenditure (typically a spreadsheet) into:

    • non-production expenditure
    • Core expenditure: Development
    • Other core expenditure: UK
    • Other core expenditure: non-UK
    • Delivery/distribution costs
  • Details of any methods of apportionment and/or assumptions used in producing these figures and any other information relevant to the claim.

 

Multi-period productions

Where the production of the film spans more than one accounting period the information required to support any claim is similar to that set out above, expect that the company should state the amount of planned amounts of:

  • Core expenditure: UK
  • Core expenditure: Total
  • In the case of a limited-budget film, the planned total core expenditure on the film, by the FPC and any co-producers.

‘Final’ figures not available

Where the FPC retains an interest in the film after its completion and may be obliged to make payments related to its production in later periods it may be necessary to estimate the final amounts of total core expenditure and core expenditure that is UK expenditure - see FPC40040 and FPC10160 for details of how such future obligations impact on the minimum UK expenditure condition and the film’s limited-budget status.