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HMRC internal manual

Television Production Company Manual

From
HM Revenue & Customs
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Eligible expenditure: UK expenditure: services directly related to single territory

S1216AH, S1216CG Corporation Tax Act 2009

The amount of Television Tax Relief (TTR) to which a Television Production Company (TPC) is entitled in respect of a television programme trade is determined by the amount of core expenditure (see TPC50010) which is used or consumed in the UK.

The services provided by third parties may take place in several locations at once. It may not be readily apparent where a service is actually used or consumed, particularly in respect of post-production services.

Furthermore, specific elements of programmes may be outsourced and this can create the impression that services are being used outside of the UK. However, the location of the service provider can be misleading.

The location of the TPC is the physical location of the creative, technical and artistic control of the programme. This is typically the location where services, as well as goods, are used or consumed.

This will often be located in a studio or other bespoke facilities suitable for that particular type of programme. This means that the point of consumption for most services will be that studio.

Where the principal photography (TPC10130) takes place in a single studio, it should be clear where services are used or consumed.

Example 1

An actor is asked to take part in filming on location in the UK.

The nature of the service is the provision of a specialist performance required for a specific scene as part of principal photography.

Because this principal photography takes place in the UK, the actor’s service is used or consumed by the TPC within the UK. It therefore meets the definition of UK expenditure.

Example 2

An actor is asked to take part in filming on location outside the UK.

The nature of the service is the provision of a specialist performance required for a specific scene as part of principal photography.

Because this principal photography takes place outside the UK, the actor’s service is not used or consumed by the TPC within the UK. It therefore does not meet the definition of UK expenditure.

A television programme may have multiple locations depending on the requirement to use external locations or utilise specialised recording facilities.

A similar approach should be taken for the other services directly associated with principal photography. There is a clear link to the use of physical goods and services within a specific location. These include those supplied by an actor, camera operator, make-up artist, production manager, caterer and others directly involved at the location.

There is also a direct link for more intangible items of expenditure. This includes items like the script which are also used or consumed at the location.

Similarly, specific props and costumes might only be used in certain locations. These will be used or consumed at the location where they are used for principal photography.

It is important to note that the expenditure on these services is not UK expenditure simply by virtue of the fact that the service is physically performed within the UK by the supplier. Instead, it is UK expenditure because they are used or consumed by the recipient in the UK.