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HMRC internal manual

Television Production Company Manual

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HM Revenue & Customs
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Overview and general definitions: introduction

Part 15A Corporation Tax Act 2009

 

Finance Act 2013 (Now incorporated into CTA 2009 Part 15A) introduced a new regime for the taxation of Television Production Companies (TPCs) and a new relief for the television industry, Television Tax Relief (TTR).

The legislation on TPCs provides specific rules for relief on television programmes including high-end television productions and animations. The rules state how all television production trades should be taxed, as well as laying down the conditions for TTR.

Tax treatment

For tax purposes only, the legislation:

  • deems that the production of each programme is a separate trade with a start and end date separate to that of the company,
  • describes what income and expenditure is eligible for additional tax relief and circumstances where there are exceptions to the normal rules for income and expenditure, and
  • restricts the use of losses associated with that trade in certain circumstances.

This applies for all television production trades.

TTR applies to expenditure on relevant programmes by a TPC (TPC10110). Animations are relevant programmes. There are some specific rules related to animations.

If there is no TPC for a programme, then the rules do not apply. This might be because:

  • no company meets the required criteria, or
  • the company has elected to be treated as not meeting the criteria.

Television Tax Relief (TTR)

TTR applies to TPCs engaged in the making of:

  • a British programme (TPC40030),
  • that is intended for broadcast (TPC40020), and
  • at least 25% of core expenditure (TPC50010) is incurred on goods or services used or consumed in the United Kingdom.  From 1 April 2015 this reduces to 10% for programmes which had not completed principal photography by that date (TPC50050).

Those TPCs that are entitled to TTR can claim:

  • an additional deduction in computing their taxable profits (TPC55010), and
  • where that additional deduction results in a loss, to surrender losses for a payable tax credit (TPC55100).

Both the additional deduction and the payable credit are calculated on the basis of UK core expenditure up to a maximum of 80% of the total core expenditure by the TPC. Core expenditure is expenditure on pre-production, principal photography and post-production.

Commencement: TTR

TTR is available for expenditure that is used or consumed on or after 1 April 2013.