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HMRC internal manual

Television Production Company Manual

Overview and general definitions: State aid

A State aid is defined in Article 107(1) Treaty on the Functioning of the European Union as:

‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods’. Any such aid ‘shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

The Department for Business, Energy & Industrial Strategy (BEIS) provides further information on State aids.

Companies applying for any of the Creative Industry Tax Reliefs, which are all State aids, must bear the following in mind when applying for relief.


State aid intensity and Cumulation

A Television Production Company must consider whether it has received any forms of aid from other sources as these must be ‘cumulated’ to arrive at the intensity figure.

Cumulation means that you must add up any State aid received from more than one source going to the same project.

Other forms of State aid may include: grants, direct payments, interest rate subsidies, tax reliefs, repayable advances, reimbursable grants, guarantees, tax advantage or exemption, risk finance, or any aid by a state or through its own resources. This list is not exhaustive and companies should determine whether any payments, grants etc. they receive are State aids which may need to be taken into account when determining whether the project has reached an intensity level. The intensity level is the maximum amount of State aid that a project is permitted to receive in relation to the budget, after cumulation from all sources.

High-end Television and Animation Tax Reliefs are State aids notified to the European Commission under the Cinema Communication. In common with other aids under this Communication, they have an intensity level (a maximum cumulation limit of State aid) of 50% of the budget for the programme concerned. Therefore, the aid received from all State aid sources must not exceed 50% of the total budget.

Children’s Television Tax Relief (CTR) is notified under the General Block Exemption Regulations (GBER). This has the same cumulation limit but adds further restrictions to the level of aid granted and the amount of overall aid that may be granted in any year. A recipient of aid under CTR cannot receive more than €75 million in any year. Additionally, the total aid that may be granted under the measure cannot exceed €150 million in any year.

There is no limit to the amount of State aid that a company can receive as long as it does not exceed the intensity level. Receipts of aid in excess of this limit will need to be repaid to the organisation or Department granting the aid which exceeds the limit.


Undertakings in Difficulty

Undertakings in difficulty can only receive a State aid under the restrictive conditions for rescue and restructuring aid. Any other form of State aid received is explicitly excluded, even when other companies that are not in difficulties can receive such aid.

This means that to be eligible for any State aids, a company must be trading and a going concern at the time it receives the aid.

Undertakings in difficulty are defined in the European Commission Guidelines: Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty (2014/C 249/01).

See also the General Block Exemption Regulation No 651/2014 of 17 June 2014 (amended in 2017), particularly Article 2.

The 2014 guidelines are lengthy, but these extracts from point 20 of the rescuing and restructuring guidelines define a company in difficulty as follows:

For the purposes of these guidelines, an undertaking is considered to be in difficulty when, without intervention by the State, it will almost certainly be condemned to going out of business in the short or medium term. Therefore, an undertaking is considered to be in difficulty if at least one of the following circumstances occurs:

(a)        In the case of a limited liability company, where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital.

(b)        In the case of a company where at least some members have unlimited liability for the debt of the company, where more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses.

(c)        Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors.

Point 24 of the guidelines states an SME that has been in existence for less than three years will not be considered to be in difficulty unless it meets the condition set out in paragraph 20(c).



As part of State Aid Modernisation measures, the European Commission has created a database to publish information about State aid granted by all Member States.  HMRC is required to populate this database with details of relevant tax reliefs received from 1 July 2016 and above €500,000, which the Commission will then publish.

The actual amount of the State aid will not be published. Instead, the name of the recipient will be published alongside one of six broad bands ranging from €0.5 million to €30m or more.

The UK has a legal requirement to provide the information on State aids granted above €0.5m to the European Commission.  HMRC is disclosing this information because there is a specific legal basis to do so. Information about the amount of tax paid by a company, and any other details about the company’s tax affairs, remain confidential.