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HMRC internal manual

Film Production Company Manual

Co-productions: minimum UK expenditure


In the case of a co-production the requirement that at least 25% or 10% (whichever applies) of the core expenditure on the film must be UK expenditure (FPC40040) is applied by reference to expenditure incurred by all the co-producers (not just to the core expenditure incurred by the UK film production company (FPC)).

This means that any core expenditure incurred by an overseas co-producer which is also UK expenditure counts when applying the 25% or 10% (whichever applies) minimum threshold. So, for example, where the UK expenditure incurred by a UK FPC is only 20% of the total core expenditure, the 25% threshold can be met if an overseas co-producer incurs 5% or more core expenditure which is also UK expenditure. The same aggregation will apply to the 10% threshold


A film is made as a co-production under the terms of the UK-France bilateral treaty, thereby qualifying as a British film.

Total core expenditure on the film is £10m, of which £3m is UK expenditure. The UK co-producer incurs £2m of this expenditure, the remaining £1m being incurred by the French co-producer.

Because 30% of the total core expenditure on the film is UK expenditure, the film will meet the minimum UK expenditure threshold and, provided the other tests are met, the UK FPC will be entitled to Film Tax Relief on the basis of the UK core expenditure which it has incurred.