Corporation Tax Act 2009

Film tax credits

1201 Film tax credit claimable if company has surrenderable loss

(1) If film tax relief is available to the company, it may claim a film tax credit for an accounting period in which it has a surrenderable loss.

(2) The company’s surrenderable loss in any period is—

(a) the company’s loss for the period in the separate film trade, or

(b) if less, the available qualifying expenditure for the period.

(3) For the first period of account during which the separate film trade is carried on, the available qualifying expenditure is the amount that is E for that period for the purposes of section 1200(1).

(4) For any period of account after the first, the available qualifying expenditure is given by—

E - S

where—

• E is the amount that is E for that period for the purposes of section 1200(2), and

• S is the total amount surrendered in previous periods under section 1202(1).

1202 Surrendering of loss and amount of film tax credit

(1) The company may surrender the whole or part of its surrenderable loss in an accounting period.

(2) If the company surrenders the whole or part of that loss, the amount of the film tax credit to which it is entitled for the accounting period is given by—

L × R

where—

• L is the amount of the loss surrendered, and

• R is the payable credit rate (see subsection (3)).

(3) The payable credit rate is—

(a) for a limited-budget film, 25%, and

(b) for any other film, 20%.

(4) The company’s loss in the separate film trade for the accounting period is reduced by the amount surrendered.

1203 Payment in respect of film tax credit

(1) If the company—

(a) is entitled to a film tax credit for an accounting period, and

(b) makes a claim,

the Commissioners for Her Majesty’s Revenue and Customs (“the Commissioners”) must pay to the company the amount of the credit.

(2) An amount payable in respect of—

(a) a film tax credit, or

(b) interest on a film tax credit under section 826 of ICTA,

may be applied in discharging any liability of the company to pay corporation tax.

To the extent that it is so applied the Commissioners' liability under subsection (1) is discharged.

(3) If the company’s company tax return for the accounting period is enquired into by the Commissioners, no payment in respect of a film tax credit for that period need be made before the Commissioners' enquiries are completed (see paragraph 32 of Schedule 18 to FA 1998).

In those circumstances the Commissioners may make a payment on a provisional basis of such amount as they consider appropriate.

(4) No payment need be made in respect of a film tax credit for an accounting period before the company has paid to the Commissioners any amount that it is required to pay for payment periods ending in that accounting period—

(a) under PAYE regulations,

(b) under section 966 of ITA 2007 (visiting performers), or

(c) in respect of Class 1 contributions under Part 1 of the Social Security Contributions and Benefits Act 1992 (c. 4) or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7).

(5) A payment in respect of a film tax credit is not income of the company for any tax purpose.