Broadcasting Act 1981

2 (1) The profits of a programme contractor for an accounting period shall be computed in accordance with this paragraph.

(2) The profits shall consist of the excess of relevant income over relevant expenditure.

(3) " Relevant income " means—

(a) income which accrues to the contractor in connection (dirrectly or indirectly) with the provision of programmes by him, and

(b) where income accrues to a subsidiary of the contractor in connection (directly or indirectly) with the provision of programmes by the contractor such part of that income as, in the opinion of the Authority, should be attributed to the contractor as reflecting the contractor's financial interest in the subsidiary.

(4) Without prejudice to the generality of sub-paragraph (3) " relevant income " includes all the contractor's advertising receipts for the accounting period in question.

(5) " Relevant expenditure " means-

(a) expenditure properly chargeable to revenue account which is incurred by the contractor in connection (directly or indirectly) with the provision of programmes by him, and

(b) where a subsidiary of the contractor incurs expenditure properly chargeable to revenue account in connection (directly or indirectly) with the provision of programmes by the contractor, such part of that expenditure as, in the opinion of the Authority, should be attributed to the contractor as reflecting the contractor's financial interest in the subsidiary.

(6) In ascertaining relevant income or relevant expenditure no account shall be taken of—

(a) interest on a loan, or

(b) so much of any receipt or expenditure as in the opinion of the Authority is attributable to the provision of programmes outside the United Kingdom.

(7) Where relevant income consists of advertising receipts, the income shall be attributed to accounting periods in accordance with the provisions of paragraph 1 and the same principle should be followed in relating other items of income, and items of expenditure, to accounting periods.

(8) In this paragraph " programmes " means—

(a) in the application of this Schedule in relation to the additional payments mentioned in section 32(1)(6), television programmes, including (except in the case of a teletext contractor who is not a TV programme contractor and of sub-paragraph (6)(b)) advertisements or other programmes for broadcasting on the Fourth Channel;

(b) in the application of this Schedule in relation to the additional payments mentioned in section 32(2)(b), local sound broadcasts.