Legalize / United Kingdom / Public General Act

Corporation Tax Act 2009

Type Public General Act

Publication 2009-03-26

Last updated 2025-04-01

State In force

Department Statute Law Database

Source legislation.gov.uk

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(a) the asset concerned was acquired by any company on or after 1 July 2020 directly or indirectly as a consequence of, or otherwise in connection with, the realisation by another person of an asset (“the other asset”),

(b) that company and that other person were related parties at the time of the realisation of the other asset,

(c) the other asset was a pre-FA 2002 asset or a restricted asset in the hands of any company at any time during the period beginning with 1 July 2020 and ending with the time of the realisation mentioned in paragraph (a),

(d) the other asset was not the subject of a relieving acquisition at any time during the period beginning with 1 July 2020 and ending with the time of the realisation mentioned in paragraph (a), and

(e) the asset concerned has not been the subject of a relieving acquisition at any time after the realisation mentioned in paragraph (a).

(3) The condition in subsection (2)(c) is to be treated as met if—

(a) immediately before 1 July 2020 the other asset was held by a person that was not a company,

(b) immediately before 1 July 2020 that person was a related party in relation to a company, and

(c) the other asset would have been a pre-FA 2002 asset in the hands of that company on 1 July 2020 had that company acquired the asset from that person immediately before that date.

(4) For the purposes of subsection (2) it does not matter whether—

(a) the other asset is the same as the asset concerned,

(b) the asset concerned is acquired at the time of the realisation of the other asset, or

The special rules

900E

(1) This section applies in respect of a restricted asset of a company if it is a restricted asset by reason of section 900B.

(2) If the company was the first company to acquire the asset on or after 1 July 2020, the relevant Chapters of this Part have effect as if the company acquired the asset at no cost.

(3) If the company was not the first company to acquire the asset on or after 1 July 2020, the relevant Chapters of this Part have effect as if the company acquired the asset for the adjusted amount.

(4) The adjusted amount is—

$$A − B$where—A is the amount of consideration—for which the company actually acquired the asset, orif different, for which it would (ignoring this section) be treated for the purposes of the Taxes Acts as having acquired the asset, andB is the market value of the asset on the date it was first acquired by a company on or after 1 July 2020.$

(5) Where B is greater than A the adjusted amount is nil.

(6) In this section—

“market value”, in relation to an asset, means the price the asset might reasonably be expected to fetch on a sale in the open market, and

“the relevant Chapters of this Part” means—Chapter 3 (debits in respect of intangible fixed assets),Chapter 15 (adjustments on change of accounting policy), andChapter 5 (calculation of tax written-down value) in so far as it has effect for the purposes of Chapters 3 and 15.

900F

(1) This section applies in respect of a restricted asset of a company if it is a restricted asset by reason of section 900C or 900D.

(2) The relevant Chapters of this Part have effect as if the company acquired the asset for the adjusted amount.

(3) The adjusted amount is calculated as follows—

Step 1 Find the amount—for which the company actually acquired the asset, orif different, for which it would (ignoring this section) be treated for the purposes of the Taxes Acts as having acquired the asset.

Step 2 Deduct from the amount found at Step 1 such proportion of the notional deduction amount for the relevant other asset or each relevant other asset as is just and reasonable in the circumstances.

(4) Where the deduction at Step 2 results in a negative value the adjusted amount is nil.

(5) In subsection (3)—

“relevant other asset” means an asset by reference to which the conditions in paragraphs (c) and (d) of section 900C(2) or (as the case may be) the conditions in section 900D(2) were met, and

“the notional deduction amount”, in relation to a relevant other asset, means—in a case where section 900E(2) would have applied had the company acquired the relevant other asset instead of the restricted asset, an amount equal to the market value of the relevant other asset at the time the restricted asset was acquired, andin a case where section 900E(3) would have applied had the company acquired the relevant other asset instead of the restricted asset, an amount equal to the market value of the relevant other asset at the time it was first acquired by a company on or after 1 July 2020, andin a case where subsection (2) of this section would have applied had the company acquired the relevant other asset instead of the restricted asset, the amount that would have been deducted at step 2 of subsection (3) of this section if the company had acquired the relevant other asset instead of the restricted asset.

(6) In this section “market value” and “the relevant Chapters of this Part” have the same meaning as in section 900E.

Supplementary provisions

900G

For the purposes of this Chapter, an asset is the subject of a relieving acquisition if it is acquired by a company from a person who at the time of the acquisition is not a related party in relation to the company.

900H

(1) References in this Chapter to one person being a related party in relation to another person are to be read as including references to the participation condition being met as between those persons.

(2) References in subsection (1) to a person include a firm in a case where, for section 1259 purposes, references in this Chapter to a company are read as references to the firm.

(3) In subsection (2) “section 1259 purposes” means the purposes of determining under section 1259 the amount of profits or losses to be allocated to a partner in a firm.

(4) Section 148 of TIOPA 2010 (when the participation condition is met) applies for the purposes of subsection (1) as it applies for the purposes of section 147(1)(b) of TIOPA 2010.

900I

(1) A company that acquires an intangible fixed asset in pursuance of an unconditional obligation under a contract is to be treated for the purposes of this Chapter as having acquired the asset on the date on which the company became subject to that obligation or (if later) the date on which that obligation became unconditional.

(2) An obligation is unconditional if it may not be varied or extinguished by the exercise of a right (whether under contract or otherwise).

Chapter 16B — Fungible assets

900J

(1) For the purposes of this Part—

(a) fungible assets of the same kind that are held by the same person in the same capacity are treated as indistinguishable parts of a single asset,

(b) that asset is treated as growing as additional assets of the same kind are created or acquired, and

(2) In this Part “fungible assets” means assets of a nature to be dealt in without identifying the particular assets involved.

900K

(1) For the purposes of section 900J—

(a) pre-FA 2002 assets,

(b) restricted assets, and

are to be regarded as assets of different kinds.

(2) If section 900J applies (whether or not it is a case where subsection (1) of this section has effect)—

(a) a single asset comprising pre-FA 2002 assets is treated as itself being a pre-FA 2002 asset,

(b) a single asset comprising restricted assets is treated as itself being a restricted asset, and

(c) a single asset comprising standard intangible fixed assets is treated as itself being a standard intangible fixed asset.

900L

(1) This section applies if—

(a) a company realises a fungible asset, and

(b) apart from subsection (1) of section 900K, the asset would be treated as part of a single asset comprising more than one of the kinds of asset referred to in that subsection.

(2) The realisation is treated—

(a) as diminishing a single asset of the company comprising pre-FA 2002 assets in priority to diminishing a single asset of the company comprising restricted assets or a single asset of the company comprising standard intangible fixed assets, and

(b) as diminishing a single asset of the company comprising restricted assets in priority to diminishing a single asset of the company comprising standard intangible fixed assets.

900M

(1) Fungible assets acquired by a company that would not otherwise be treated as pre-FA 2002 assets are so treated so far as they are identified, in accordance with the following rules, with pre-FA 2002 assets realised by the company.

(2) Fungible assets acquired by a company that would not otherwise be treated as pre-FA 2002 assets or restricted assets are to be treated as restricted assets so far as they are identified, in accordance with the following rules, with restricted assets realised by the company.

(3) Rule 1 is that assets acquired are identified with pre-FA 2002 assets or restricted assets of the same kind realised by the company within the period beginning 30 days before and ending 30 days after the date of the acquisition.

(4) The reference in subsection (3) to assets “of the same kind” is to assets that are, or but for section 900K(1) would be, treated as part of a single asset because of section 900J.

(5) Rule 2 is that assets realised earlier are identified before assets realised later.

(6) Rule 3 is that assets acquired earlier are identified before assets acquired later.

900N

(1) This section applies in respect of a single asset of a company that comprises restricted assets (and is itself treated as a restricted asset by reason of section 900K(2)(b)).

(2) The relevant Chapters of this Part have effect as if the company acquired the single asset for the sum of the amounts for which the company would have been treated for the purposes of those Chapters as having acquired each of the restricted assets that comprises the single asset.

(3) In this section “the relevant Chapter of this Part” has the meaning given by section 900E(6).

900O

In this Chapter—

“restricted asset” has the same meaning as in Chapter 16A, and

“standard intangible fixed asset” means an intangible fixed asset that is neither a pre-FA 2002 asset nor a restricted asset.

Application of Chapter in relation to employees of overseas companies who work for companies in the UK

Claim for additional deduction

Interest from tax reserve certificates

Transitional provisions and savings

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Income from the production

Expenses of management of a company's investment business

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1058A

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Total amount of company's PAYE and NIC liabilities

1058B

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1058C

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1058D

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Income from Ulster Savings Certificates

Apportionment to different periods

Power to undo changes

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1131A

(1) This section applies if—

(a) a company makes a staff provision payment,

(b) the company is treated as making a payment of deemed direct earnings the amount of which is calculated by reference to the amount of the staff provision payment, and

(c) the company pays a secondary Class 1 national insurance contribution in respect of the payment of deemed direct earnings.

(2) In determining the company's qualifying expenditure on externally provided workers in accordance with section 1129(2) or section 1131(2) the amount of the staff payment provision is to be treated as increased by the amount of the contribution.

(3) In determining the company's qualifying expenditure on externally provided workers in accordance with section 1129(2) the aggregate of the relevant expenditure of each staff controller is to be treated as increased by the amount of the contribution.

(4) But subsection (2) does not apply to the extent that the expenditure incurred by the company in paying the contribution is met directly or indirectly by a staff controller.

(5) “A payment of deemed direct earning” means a payment the company is treated as making by reason of regulation 14 of the Social Security Contributions (Intermediaries) Regulations 2000 or regulation 14 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.

1196A

(1) The film must—

(a) be intended for theatrical release, or

(b) be a television programme intended for broadcast to the general public that meets conditions A to D in section 1216AB (meaning of “relevant programme”).

(2) For this purpose—

(a) “theatrical release” means exhibition to the paying public at the commercial cinema,

(b) a film is not regarded as intended for theatrical release unless it is intended that a significant proportion of the earnings from the film should be obtained by such exhibition, and

(3) Whether the condition in subsection (1) is met is determined for each accounting period of the company during which film-making activities are carried on in relation to the film, in accordance with the following rules.

(4) If the condition in subsection (1) is met at the end of an accounting period, it is treated as having been met throughout that period (subject to subsection (5)(b)).

(5) If the condition in subsection (1) is not met at the end of an accounting period—

(a) it is treated as having been not met throughout that period, and

(b) it cannot be met in any subsequent accounting period.

This does not affect any entitlement of the company to relief in an earlier accounting period for which the condition in subsection (1) was met.

104AA

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961A

In sections 960 and 961, “the relevant tax year” in relation to an amount of estate income, means the tax year in which the amount of estate income would be treated as arising if—

(a) the references in this Chapter to accounting periods were references to tax years, and

(b) section 950(3) (apportionment between accounting periods) were ignored.

962A

(1) The part of the aggregate income of the estate from which a sum within section 951(1)(b) is treated as paid is determined by applying assumptions A and B in that order.

(2) Assumption A is that if there are different persons with an absolute interest in the residue of the estate, such apportionments of the aggregate income of the estate in respect of those interests are to be made as are just and reasonable for the different interests.

(3) Assumption B is that sums are paid from the income to which a person’s share of the residuary estate relates in descending order, starting with the income bearing income tax at the highest rate and ending with the income bearing income tax at the lowest rate (subject to subsection (3A)).

(3A) For the purposes of assumption B, where that income includes—

(a) income bearing income tax at 0% by virtue of section 963(1A), and

(b) other income bearing income tax at 0%,

sums are to be paid from income within paragraph (a) after income within paragraph (b).

(4) If some, but not all, of the aggregate income of the estate is income within section 963, assumption C is applied before assumptions A and B.

(5) Assumption C is that the basic amount is paid from income that is not within section 963 before it is paid from income within that section.

(6) Assumptions A and B then apply—

(a) first to determine the part of the income not within that section from which the basic amount is paid, and

(b) then to determine the part of the income within that section from which the basic amount is paid.

1045A

(1) A company may not make a claim under section 1044(6) (an “additional deduction claim”) after the end of the claim notification period unless—

(a) the company has made an R&D claim during the period of three years ending with the last day of the claim notification period,

(b) the company makes a claim notification in respect of the additional deduction claim within the claim notification period, or

(c) the accounting period in respect of which the additional deduction claim is made falls within the same period of account as another accounting period in respect of which the company has made an R&D claim or a claim notification.

(2) For the purposes of subsection (1)(a) ignore any R&D claim for an accounting period beginning before 1 April 2023 that is included in the company’s company tax return only by virtue of an amendment made on or after that date (see paragraph 83B(2) of Schedule 18 to FA 1998).

1054A

(1) A company may not make a claim under section 1054(2) (an “R&D tax credit claim”) after the end of the claim notification period unless—

(a) the company has made an R&D claim during the period of three years ending with the last day of the claim notification period,

(b) the company makes a claim notification in respect of the R&D tax credit claim within the claim notification period, or

(c) the accounting period in respect of which the R&D tax credit claim is made falls within the same period of account as another accounting period in respect of which the company has made an R&D claim or a claim notification.

(2) For the purposes of subsection (1)(a) ignore any R&D claim for an accounting period beginning before 1 April 2023 that is included in the company’s company tax return only by virtue of an amendment made on or after that date (see paragraph 83B(2) of Schedule 18 to FA 1998).

1120A

(1) This section applies, in relation to an accounting period, where the following conditions are met.

(2) The first condition is that, for the duration of the accounting period, an enterprise (“E”) is related to a partner enterprise or linked enterprise (“F”).

(3) The second condition is that, at the start of the accounting period, both E and F are small or medium-sized enterprises.

(4) The third condition is that, at the end of the accounting period, E is not a small or medium-sized enterprise by reason only that F has, during the accounting period, exceeded the employee limit or either of the financial limits.

(5) Both E and F are to be treated as if they were small or medium-sized enterprises for the accounting period.

1120B

(1) This section applies, in relation to an accounting period, where the following conditions are met.

(2) The first condition is that, at the start of the accounting period, an enterprise (“E”) was not a small or medium-sized enterprise by reason only that a partner enterprise or linked enterprise to which E was related exceeded the employee limit or either of the financial limits.

(3) The second condition is that, during the accounting period, control of E was acquired by a company that, at the time of the acquisition, was a small or medium-sized enterprise.

(4) E is to be treated as if it were a small or medium-sized enterprise for the accounting period.

(5) In subsection (3) “control” has the same meaning as in section 1124 of CTA 2010.

1126ZA

(1) Expenditure on data licences or cloud computing services is not to be treated as attributable to relevant research and development if, in connection with the grant of a licence or the provision of a service, a relevant person obtains—

(a) a right to sell data in respect of which the licence is granted or the service is provided (as the case may be);

(b) a right to publish, share or otherwise communicate data in respect of which the licence is granted or the service is provided (as the case may be) to a third party, other than for the purposes of communications reasonably necessary for, or incidental to, the purposes of the relevant research and development.

(2) Expenditure on data licences or cloud computing services is not to be treated as attributable to relevant research and development so far as it is attributable to a qualifying indirect activity.

(3) In this section—

“qualifying indirect activity” means an activity mentioned in paragraph 31 of the Guidelines on the Meaning of Research and Development for Tax Purposes issued on 7 March 2023 and as amended from time to time;

“relevant person” has the meaning given in section 1126A(10).

1139A

(1) References in this Part to expenditure incurred on payments (however expressed) are references to expenditure incurred on payments made before the making of a claim under this Part in relation to that expenditure.

“R&D claim”

1142A

(1) For the purposes of this Part—

“claim notification” means, in relation to an R&D claim, a notification made by the company to an officer of His Majesty’s Revenue and Customs in accordance with regulations under subsection (2);

“claim notification period” means, in relation to an R&D claim, the period—beginning with the first day of the period of account which is the same as the accounting period in respect of which the claim is made, or within which that accounting period falls, andending with the last day of the period of six months beginning with the first day after that period of account.

(2) The Commissioners for His Majesty’s Revenue and Customs may by regulations specify, in relation to a claim notification—

(a) information to be provided with the notification;

(b) the form and manner in which the notification is to be made.

1142B

For the purposes of this Part an “R&D claim” means a claim under—

(a) section 1042C (R&D expenditure credits),

(b) section 1044 (relief for SMEs: additional deduction), or

Limit on State aid

Income from Ulster Savings Certificates

Power to undo changes

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130A

(1) A receipt or expense that is attributable to the operation of a write-down order, or to a write-down order ceasing to have effect, is not brought into account in calculating the profits of a trade.

(2) In this section “write-down order” means an order under section 377A of the Financial Services and Markets Act 2000 (court order writing down liabilities of insurer).

323B

(1) Subsection (2) applies if a debtor relationship of a company is modified by a write-down order.

(2) The company is not required to bring into account for the purposes of this Part a credit in respect of any change in the carrying value of the liability representing the modified debtor relationship.

(3) If as a result of subsection (2) no credit was brought into account in respect of a change in the carrying value of a liability representing a debtor relationship, the company may not bring into account a debit for the purposes of this Part in respect of a change in the carrying value of that liability, to the extent that the change represents a reversal of the change in carrying value to which subsection (2) applied.

(4) In this section “write-down order” means an order under section 377A of the Financial Services and Markets Act 2000 (court order writing down liabilities of insurer).

1142C

(1) The right of a company to be paid an amount of R&D expenditure credit or R&D tax credit may not be assigned.

(2) Accordingly, a purported assignment of such a right, or an agreement to assign such a right, is void.

(3) References to assignment in this section are to be read in Scotland as references to assignation.

1142D

(1) Where an amount of R&D expenditure credit or R&D tax credit is owed to a company, an officer of Revenue and Customs may not pay the amount to a person other than the company (even on the instruction or at the request of the company).

(2) Subsection (1) does not apply if—

(a) the company requests that payment be made to a person connected with the company, or

(b) the officer is satisfied that exceptional circumstances make payment to the company impracticable or inconvenient.

1142E

Any order or regulations under this Part may—

(a) contain incidental, supplemental, consequential and transitional provision and savings;

(b) make different provision for different purposes ....

Part 14A — Films, television programmes and video games

Chapter 1 — Introduction and interpretation

Introduction to Part

1179A

(1) This Part—

(a) lays down special rules about the taxation of companies in relation to certain production activities in creative sectors, and

(b) provides an entitlement to a credit in respect of expenditure on those activities.

(2) In particular—

(a) this Chapter makes general provision about the application of Chapters 2 and 3 and about the interpretation of this Part;

(b) Chapter 2 lays down the special rules about taxation;

(d) Chapter 4 makes provision about the application of this Part to films and television programmes;

(e) Chapter 5 makes provision about the application of this Part to video games.

1179AA

(1) Chapters 2 and 3 apply where there is a qualifying production and a qualifying company for that production.

(2) The later Chapters supply the meanings of those terms.

(3) See in particular—

(a) section 1179D, in relation to films and television programmes;

(b) section 1179F, in relation to video games.

(4) Whether a company is the qualifying company for a qualifying production (including whether the production is a qualifying production) is to be assessed separately in relation to each accounting period of the company.

(5) The assessment is to be made by reference to the state of affairs at the end of that period.

(6) So far as future events are relevant to the assessment, it is to be made by reference to the reasonable expectations of the company at that time.

(7) Subsections (5) and (6) are subject to any provision of this Part that provides for—

(a) a production no longer to be regarded as a qualifying production in an accounting period as a result of events after the end of that period ;

(b) the submission of a film, television programme or video game certificate after the end of an accounting period.

(8) Once a qualifying company has made an election under section 1179B (1) in respect of a qualifying production, no other company can subsequently be the qualifying company for that production.

(9) In this Part, “production”, except when contained in another defined term or used to refer to the act of producing something, means—

(a) a film (see section 1179DA),

(b) a television programme (see section 1179DD), or

Definitions and miscellaneous provision

1179AB

(1) In this Part, “UK expenditure” means expenditure on goods or services that are used or consumed in the United Kingdom.

(2) Any apportionment of expenditure for the purposes of this Part between expenditure that is and is not UK expenditure is to be made on a just and reasonable basis.

1179AC

(1) In this Part, “company tax return” has the same meaning as in Schedule 18 to FA 1998 (see paragraph 3(1)).

(2) Any amendment to a company tax return that must be made by virtue of this Part, and any assessment to give effect to such a requirement, can be made despite any limitation on the time within which such an amendment or assessment can normally be made.

1179AD

For the purposes of this Part, a company is in the same group as another company if those companies are in the same group for the purposes of Part 5 of CTA 2010.

1179AE

(1) Regulations made by the Secretary of State under this Part are to be made by statutory instrument.

(2) An instrument containing such regulations is subject to annulment in pursuance of a resolution of the House of Commons.

(3) A power to make regulations under this Part includes the power to make incidental, supplemental, consequential and transitional provision and savings.

Chapter 2 — Special rules about taxation

The separate production trade

1179B

(1) The qualifying company for a qualifying production may elect in its company tax return for an accounting period for the production to be taxed as a separate trade.

(2) The effect of such an election is that the activities of the company in relation to the production are to be treated for corporation tax purposes as a trade separate from any other activities of the company (including activities in relation to other qualifying productions).

(3) In this Part—

(a) that trade is called “the separate production trade”;

(b) the accounting period to which the return containing the election relates is called “the opt-in period”.

1179BA

(1) When the qualifying company is treated as beginning to carry on the separate production trade is determined by—

(a) section 1179DW, in the case of a film or television programme;

(b) section 1179FO, in the case of a video game.

(2) If the result is that the separate production trade is treated as having been carried on in an accounting period before the opt-in period, any relevant company tax return must be amended so as to give effect to that treatment in that earlier accounting period.

(3) Once a company has made an election under section 1179B (1), the activities of the company in relation to the production are to continue to be treated as a separate trade in accordance with this Chapter even if—

(a) the production ceases to be a qualifying production, or

(b) the company ceases to be the qualifying company for it.

(4) That is the case even if the production ceases to be regarded as a qualifying production in the opt-in period as a result of events after the end of that period.

(5) In the following provisions of this Chapter, “qualifying production” and “qualifying company” are accordingly capable of including productions or companies that used to be so.

Accounting for the separate trade

1179BB

(1) The profits of the separate production trade are to be calculated in accordance with this section.

(2) For the first period of account, the following are to be brought into account—

(a) as a debit, the costs of the qualifying production incurred by the qualifying company to date, and

(b) as a credit, the proportion of the qualifying company’s estimated total income from the qualifying production that is treated as earned at the end of that period.

(3) For subsequent periods of account, the following are to be brought into account—

(a) as a debit, the difference between—

(i) the amount of the costs of the qualifying production incurred by the qualifying company to date, and

(ii) the corresponding amount for the previous period, and

(b) as a credit, the difference between—

(i) the proportion of the qualifying company’s estimated total income from the qualifying production that is treated as earned at the end of that period, and

(ii) the corresponding amount for the previous period.

(4) The proportion of the qualifying company’s estimated total income that is treated as earned at the end of a period of account is given by—

$$C/T×I$where—C is the total of the costs of the qualifying production incurred by the qualifying company to date,T is the estimated total cost to the qualifying company of the qualifying production, andI is the qualifying company’s estimated total income from the qualifying production.$

(5) What counts as costs of, and income from, the qualifying production is determined by—

(a) section 1179DX, in the case of a film or television programme;

(b) section 1179FP, in the case of a video game.

(See also section 1179CB.)

(6) But nothing in this Part, except section 1179BE, allows an amount to count as costs of the qualifying production if it would not generally be allowed as a deduction in calculating the profits of a trade for corporation tax purposes.

(7) Estimates for the purposes of this section must be made—

(a) as at the balance sheet date for each period of account, and

(b) on a just and reasonable basis taking into consideration all relevant circumstances.

(8) Subsection (9) applies if a period of account of the separate production trade does not coincide with an accounting period of the qualifying company.

(9) The expenditure and receipts brought into account for the period under this section, and the resulting profit or loss, are to be apportioned to accounting periods of the company for the purposes of this Part by reference to the number of days in the periods concerned.

1179BC

(1) For the purposes of section 1179BB, costs are incurred when they are represented in the state of completion of the work in progress.

(2) Accordingly—

(a) payments in advance for work to be done are to be ignored until the work has been carried out, and

(b) deferred payments are to be recognised to the extent that the work is represented in the state of completion.

(3) But an amount that has not been paid is not an incurred cost until there is an unconditional obligation to pay it.

(4) If an obligation is linked to income being earned from the qualifying production, no amount is to be brought into account in respect of the costs of the obligation unless an appropriate amount of income is or has been brought into account.

1179BD

(1) This section applies if, before the qualifying company began to carry on the separate production trade, it incurred expenditure on the development of the qualifying production.

(2) The expenditure may be treated as expenditure of the separate production trade incurred immediately after the company began to carry on the trade.

(3) If expenditure so treated has previously been taken into account for other tax purposes, any relevant company tax return must be amended accordingly.

1179BE

(1) This section applies for corporation tax purposes in relation to the separate production trade.

(2) Expenditure that—

(a) counts as costs of the qualifying production, and

(b) would (apart from this subsection) be regarded as of a capital nature by reason only of being incurred on the creation of an asset in the form of the qualifying production,

is to be treated as expenditure of a revenue nature.

(As to other capital expenditure, see section 53 and section 1179BB (6).)

(3) Receipts that—

(a) count as income from the qualifying production, and

(b) would (apart from this subsection) be regarded as of a capital nature,

are to be treated as receipts of a revenue nature.

Losses in the separate trade

1179BF

(1) This section applies if a company makes a loss in the separate production trade in a pre-completion period (see sections 1179DY and 1179FQ).

(2) The loss is not available for loss relief, except as provided in subsections (3) and (5).

(3) The loss is not prevented from being carried forward under section 45B of CTA 2010 to be deducted from profits of the separate production trade in a subsequent period.

(4) If the loss is so carried forward and deducted, the deduction is to be ignored for the purposes of section 269ZB of CTA 2010.

(5) To the extent that the loss could be carried forward under section 45B of CTA 2010 to the completion period or a subsequent accounting period, it may instead be treated for the purposes of section 37 and Part 5 of CTA 2010 as a loss made in that period.

(6) Subsection (5) does not apply to the extent that the loss is carried forward by virtue of section 1179BG.

(7) In this section, “loss relief” includes any means by which a loss might be used to reduce the amount in respect of which the company, or any other person, is chargeable to tax.

1179BG

(1) This section applies if—

(a) a company (“the principal company”) ceases to carry on the separate production trade in respect of a production,

(b) the principal company could, but for the cessation of that trade, carry an amount (“the terminal loss”) forward under section 45A or 45B of CTA 2010 to an accounting period after that in which the cessation occurs,

(c) when the trade ceases, either the principal company or another company in the same group carries on another separate production trade under this Chapter (“the other trade”), and

(d) the ceased trade and the other trade both relate to productions that are or were qualifying productions by virtue of the same Chapter of this Part.

(2) If the other trade is carried on by the principal company, the company may, by making a claim, treat the terminal loss (or part of it) as a loss made in the other trade that is carried forward under section 45B of CTA 2010.

(3) If the other trade is carried on by another company—

(a) the principal company may surrender the terminal loss (or part of it) to the other company, and

(b) the other company may, by making a claim, elect for the surrendered amount to be treated as a loss made in the other trade that is carried forward under section 45B of CTA 2010.

(4) The carrying forward of a loss by virtue of subsection (2) or (3) is to the first accounting period beginning after the cessation of the ceased trade.

(5) If—

(a) the other trade is no longer carried on that accounting period,

(b) the company carrying on the other trade is not entitled to an expenditure credit under Chapter 3 for that accounting period in respect of the other trade, or

the claim under subsection (2) or the surrender under subsection (3) is to be treated as not having been made.

(6) The Treasury may, in relation to surrenders or elections under subsection (3), make provision by regulations corresponding, subject to such adaptations or modifications as appear to them to be appropriate, to that made by Part 8 of Schedule 18 to the FA 1998.

(7) A deduction made under section 45B of CTA 2010 by virtue of this section is to be ignored for the purposes of section 269ZB of CTA 2010.

(8) The principal company is not entitled to relief under section 45F of CTA 2010 in respect of an amount surrendered under subsection (3).

Chapter 3 — Expenditure credit

The entitlement

1179C

(1) The qualifying company for a qualifying production is entitled to an expenditure credit for—

(a) the opt-in period, and

(b) (subject to subsection (2)) any subsequent accounting period in which it continues to carry on the separate production trade.

(2) If in any of those subsequent periods the production is no longer a qualifying production, or the company is no longer the qualifying company for it, the company is not entitled to an expenditure credit for the period.

(3) But that does not affect the entitlement of the company for any subsequent period in which the production is once again a qualifying production or the company is once again the qualifying company for it.

(4) If a production ceases to be regarded as a qualifying production in an accounting period as a result of events after the end of that period—

(a) the qualifying company is no longer entitled to an expenditure credit for that period, and

(b) any company tax return drawn up in reliance on such an entitlement must be amended so as to remove anything derived from that entitlement.

(5) An expenditure credit to which a company is entitled may be claimed by the company in accordance with Part 9D of Schedule 18 to FA 1998.

1179CA

(1) The amount of the expenditure credit to which a qualifying company is entitled for an accounting period is determined as follows.

Step 1Ascertain the total of the company’s relevant global expenditure (see subsection (2)) for all accounting periods up to and including the present one.

Step 2Deduct from that total any expenditure that is not UK expenditure (see section 1179AB).

Step 3If the amount remaining after step 2 exceeds 80% of the total ascertained at step 1, deduct the amount of the excess.The remaining amount is the company’s “qualifying expenditure to date”.

Step 4Deduct from the company’s qualifying expenditure to date the amount (if any) that was the company’s qualifying expenditure to date in the accounting period for which it was last entitled to, and claimed, an expenditure credit in respect of the qualifying production.The remaining amount is the company’s “qualifying expenditure for the period”.

Step 5The amount of the credit to which the company is entitled is the relevant percentage of the company’s qualifying expenditure for the period.The relevant percentage is determined by—section 1179DV, in the case of a film or television programme;section 1179FN, in the case of a video game.

(2) Expenditure is “relevant global expenditure” for an accounting period if—

(a) it is brought into account under section 1179BB in calculating the profits of the separate production trade for that period, and

(b) it counts as relevant production expenditure in relation to the qualifying production under—

(i) section 1179DR, in the case of a film or television programme;

(ii) section 1179FJ, in the case of a video game.

Treatment of credit

1179CB

(1) An expenditure credit under this Chapter is not to be treated as income for the purposes of section 1179BB.

(2) But if a company is entitled to, and claims, an expenditure credit under this Chapter for an accounting period, the profits of the separate production trade for that period must (having first been calculated in accordance with section 1179BB) be adjusted by bringing the amount of the expenditure credit into account as a credit.

1179CC

If a company is entitled to, and claims, an expenditure credit under this Chapter for an accounting period, the credit is to be dealt with as follows.

Step 1The amount of the credit is to be applied in discharging any liability of the company to pay corporation tax for the accounting period.

Step 2Any amount remaining after step 1 is to be reduced, if necessary, to the amount given by—$A-B$where—A is the initial amount of the credit (before step 1), andB is the amount of corporation tax that would be chargeable on that amount if it were an amount of profits for the accounting period on which corporation tax was chargeable at the main rate.For provision about the treatment of an amount deducted under this step, see section 1179CD.

Step 3The amount remaining after step 2 is to be applied in discharging any liability of the company to pay corporation tax for any other accounting period.

Step 4If the company is a member of a group, it may surrender the whole or part of any amount remaining after step 3 to any other member of the group (as to which see section 1179CE).

Step 5Any amount remaining after step 4 is to be applied in discharging any other liability of the company to pay a sum to the Commissioners for His Majesty’s Revenue and Customs—under or by virtue of an enactment, orunder an agreement made in connection with any person’s liability to make a payment to the Commissioners under or by virtue of an enactment.

Step 6Any amount remaining after step 5 is (subject to sections 1179CG and 1179CH) to be paid to the company by an officer of Revenue and Customs.

1179CD

(1) This section applies if an amount is deducted under step 2 in section 1179CC from the amount of the qualifying company’s expenditure credit.

(2) If the qualifying company is a member of a group, it may, in respect of the accounting period for which the expenditure credit arises, surrender the whole or part of the deducted amount to any other member of the group (as to which see section 1179CE).

(3) To the extent that the deducted amount is not surrendered under subsection (2), it is to be carried forward to the next accounting period of the qualifying company, and subsections (4) and (5) apply.

(4) The carried-forward amount is to be applied in discharging any liability of the qualifying company to pay corporation tax for the accounting period.

(5) If—

(a) any of the carried-forward amount remains after the application of subsection (4), and

(b) the qualifying company is a member of a group,

the qualifying company may, in respect of the accounting period, surrender the whole or part of the remaining amount to any other member of the group (as to which see section 1179CE).

(6) If any of the carried-forward amount remains after the application of subsections (4) and (5), it is to be carried forward to the next accounting period of the qualifying company, and those subsections apply again in relation to that accounting period.

1179CE

(1) Subsection (3) applies if an amount of expenditure credit is surrendered by the qualifying company to another member of its group under step 4 in section 1179CC or under section 1179CD (2) or (5).

(2) For the purposes of that subsection—

(a) the accounting period in respect of which the surrender is made is “the surrender AP”;

(b) an accounting period of the other group member is an “overlapping AP” if it overlaps to any extent with the surrender AP.

(3) The surrendered amount is to be dealt with as follows.

Step 1Select an overlapping AP.

Step 2Calculate the proportion of the overlapping AP that overlaps with the surrender AP, and apply that proportion to the amount of corporation tax payable by the other group member for that overlapping AP.

Step 3Calculate the proportion of the surrender AP that overlaps with the overlapping AP, and apply that proportion to the surrendered amount.

Step 4The amount given by step 3 is to be applied in discharging the liability of the other group member to pay the corporation tax mentioned in step 2, up to the amount given by that step.

Step 5Select another overlapping AP, if there is one, and repeat steps 2 to 4.

Step 6If any of the surrendered amount remains after steps 2 to 4 have been taken in relation to each overlapping AP, the remainder is to be treated for the purposes of section 1179CC or (as the case may be) section 1179CD as if it had not been surrendered as mentioned in subsection (1).

(4) A surrender to which subsection (3) applies is not to be—

(a) taken into account in determining, for corporation tax purposes, the profits of the qualifying company or the other group member, or

(b) regarded for corporation tax purposes as the making of a distribution.

1179CF

(1) An amount within subsection (2) is to be applied as described in that subsection before any amount within subsection (3) is applied as described in that subsection.

(2) An amount is within this subsection if it is to be applied under—

(a) section 1179CD (4), or

(b) section 1179CE (3) as it applies in relation to an amount surrendered under section 1179CD (2) or (5),

in discharging the liability of a company to pay corporation tax for an accounting period.

(3) An amount is within this subsection if it is to be (or would but for subsection (1) be) applied under—

(a) section 1179CC, or

(b) section 1179CE (3) as it applies in relation to an amount surrendered under section 1179CC,

in discharging the same liability as an amount within subsection (2).

Restrictions on payment

1179CG

(1) No amount may be paid to a company at step 6 of section 1179CC if, when the company claims the expenditure credit from which the amount is derived, the company is in administration or liquidation.

(2) For the purposes of this section, a company is in administration if—

(a) it is in administration under Part 2 of the Insolvency Act 1986 or Part 3 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or

(b) a corresponding situation under the law of a country or territory outside the United Kingdom exists in relation to the company.

(3) For the purposes of this section, a company is in liquidation if—

(a) it is in liquidation within the meaning of section 247 of that Act or Article 6 of that Order, or

(b) a corresponding situation under the law of a country or territory outside the United Kingdom exists in relation to the company.

1179CH

(1) Subsection (2) applies if—

(a) a company would (but for that subsection) be entitled to be paid an amount at step 6 of section 1179CC, and

(b) the company’s tax return for the accounting period in question is enquired into by an officer of Revenue and Customs.

(2) The amount does not have to be paid to the company; but an officer of Revenue and Customs may make a payment on a provisional basis of such amount as the officer thinks fit.

(3) Subsection (4) applies if—

(a) a company would (but for that subsection) be entitled to be paid an amount at step 6 of section 1179CC, and

(b) the company has not paid to an officer of Revenue and Customs any amount that it is required to pay—

(i) under PAYE regulations,

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

(iii) in respect of Class 1 national insurance contributions,

for payment periods ending in the accounting period in question.

(4) The amount does not have to be paid to the company; but an officer of Revenue and Customs may make a payment of such amount as the officer thinks fit.

(5) For the purposes of subsection (3), a “payment period” is—

(a) in relation to PAYE regulations or Class 1 national insurance contributions, a period—

(i) which ends on the fifth day of a month, and

(ii) for which the company is liable to account for income tax and national insurance contributions to an officer of Revenue and Customs;

(b) in relation to section 966 of ITA 2007, a period for which the company is required to make a return as described in section 969(1)(b) of that Act.

Artificial arrangements

1179CI

(1) Subsections (2) and (3) apply if, at any time, a company is party to disqualifying arrangements in relation to anything that is, was or becomes a qualifying production (“the production”).

(2) The company is not entitled to an expenditure credit under this Chapter in respect of the production for any accounting period.

(3) Any relevant company tax return must be amended accordingly.

(4) Subsection (5) applies if a transaction—

(a) is attributable to arrangements (other than disqualifying arrangements) entered into otherwise than for genuine commercial reasons, and

(b) would result in a company obtaining a relevant advantage.

(5) The relevant advantage is to be counteracted by the making of just and reasonable adjustments to any amounts relevant to the calculation of the company’s entitlement to an expenditure credit under this Chapter.

(6) Those adjustments may be made (for example) by way of amendment, assessment, or modification of an assessment.

(7) For the purposes of this section, arrangements are disqualifying arrangements if their main purpose, or one of their main purposes, is to enable the company to obtain a relevant advantage.

(8) But such arrangements are not disqualifying arrangements if the obtaining of that advantage as a result of the arrangements could reasonably be regarded as consistent with—

(a) the principles (whether expressed or implied) on which the provisions of this Part are based, and

(b) the policy objectives of those provisions.

(9) For the purposes of this section, a company would obtain a relevant advantage if it would become entitled to an expenditure credit under this Chapter—

(a) to which it would not otherwise be entitled, or

(b) of a greater amount than that to which it would otherwise be entitled.

(10) In this section, “arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable.

Chapter 4 — Films and television programmes

General

1179D

(1) For the purposes of this Part—

(a) a qualifying film (see section 1179DB) or qualifying television programme (see section 1179DE) is a qualifying production, and

(b) the production company for a qualifying film or a qualifying television programme (see section 1179DP) is the qualifying company for that film or programme.

(2) The following provisions of this Chapter apply for the purposes of this Part in relation to films and television programmes.

(3) Expenditure credit under Chapter 3 is called “audiovisual expenditure credit” when the entitlement to it arises in respect of a film or television programme.

Qualifying films

1179DA

(1) “Film” includes any record, however made, of a sequence of visual images that is capable of being used as a means of showing that sequence as a moving picture.

(2) Each part of a series of films is treated as a separate film, unless—

(a) the films form a series with not more than 26 parts,

(b) the combined playing time is not more than 26 hours, and

in which case the films are treated as a single film.

(3) References to a film include the film soundtrack.

1179DB

A film is a qualifying film if it meets—

(a) the theatrical release condition (see section 1179DC),

(b) the British certification condition (see section 1179DJ), and

1179DC

(1) A film meets the theatrical release condition if—

(a) the film is intended for exhibition to the paying public at the commercial cinema, and

(b) a significant proportion of the earnings from the film is intended to be obtained by such exhibition.

(2) If the film does not meet that condition in an accounting period after the opt-in period, it cannot meet it in any subsequent accounting period (subject to section 1179E).

Qualifying television programmes

1179DD

(1) “Television programme” means any programme (with or without sounds) which—

(a) is produced to be seen on television or on the internet, and

(b) consists of moving or still images or of legible text or of a combination of those things.

(2) Two or more television programmes that are commissioned together under the same agreement are to be treated as a single television programme.

1179DE

A television programme is a qualifying television programme if—

(a) it is of an eligible category (see section 1179DF),

(b) it is not an excluded programme (see section 1179DG),

(d) in the case of a programme that is not an animation or a children’s programme, it meets the slot length and hourly cost conditions (see section 1179DI),

(e) it meets the British certification condition (see section 1179DJ), and

(f) it meets the UK expenditure condition (see section 1179DO).

1179DF

(1) The eligible categories of television programme are—

(a) dramas,

(b) documentaries,

(d) children’s programmes.

(2) A television programme is a drama if—

(a) it consists wholly or mainly of a depiction of events,

(b) the events are depicted wholly or mainly by one or more persons performing, and

(c) the whole or a major proportion of what is done by the person or persons performing, whether by way of speech, acting, singing or dancing, involves the playing of a role.

(Accordingly, “drama” may include a comedy.)

(3) A television programme is a documentary if—

(a) it depicts real events, places or circumstances,

(b) it is not a drama, and

(4) A programme is a children’s programme if, when production activities begin, it is reasonable to expect that the persons who will make up the programme’s primary audience will be under the age of 15.

(5) See section 1179EA (3) for the meaning of “animation”.

1179DG

(1) A television programme is an excluded programme if—

(a) it is an advertisement or other promotional programme,

(b) it is a news or current affairs programme or discussion programme,

(d) it consists of or includes a competition or contest, or the results of a competition or contest,

(e) it is a broadcast of a live event or of a theatrical or artistic performance given otherwise than for the purpose of being filmed, or

(f) it is produced for training purposes.

(2) But a children’s programme is not an excluded programme by virtue of being a quiz show or game show, or falling within subsection (1)(d), if the prize total does not exceed £1,000.

(3) For that purpose the “prize total” for a programme is the total of—

(a) the amount of each relevant prize that is a money prize, and

(b) the amount spent on each other relevant prize by, or on behalf of, its provider;

and here “relevant prize” means a prize offered in connection with participation in a quiz, game, competition or contest in, or promoted by, the programme.

(4) The Treasury may by regulations amend subsection (2) for the purpose of increasing the amount of the money limit for the time being specified in that subsection.

1179DH

(1) A television programme meets the broadcast condition if—

(a) it is intended for broadcast to the general public, and

(b) it is not a film that meets the theatrical release condition (see section 1179DC).

(2) If the television programme does not meet that condition in an accounting period after the opt-in period, it cannot meet it in any subsequent accounting period (subject to section 1179E).

1179DI

(1) A television programme that consists of distinct episodes meets the slot length condition if the slot length of each episode is greater than 20 minutes.

(2) A television programme that does not consist of distinct episodes meets the slot length condition if the slot length of the programme is greater than 20 minutes.

(3) A television programme meets the hourly cost condition if the average core expenditure per hour of slot length in relation to the programme is at least £1 million.

(4) In this section, “slot length” means the period of time which the episode or (as the case may be) programme is commissioned to fill.

British certification condition

1179DJ

(1) In this section, references to a certificate are to be read—

(a) in relation to a film, as references to a certificate under Schedule 1 to the Films Act 1985, and

(b) in relation to a television programme, as references to a certificate under section 1179DM.

(2) A film or television programme meets the British certification condition in a pre-completion period (see section 1179DY) if the production company’s company tax return for the period is accompanied by a valid interim certificate.

(3) A film or television programme meets the British certification condition in the completion period (see section 1179DY) and any subsequent accounting period if—

(a) the production company’s company tax return for the completion period is accompanied by a valid final certificate, or

(b) the production company has abandoned production activities in relation to the film or programme and the production company’s company tax return for the completion period is accompanied by a valid interim certificate.

(4) Subsections (2) and (3) are subject to subsections (5) and (6).

(5) If a film or television programme does not meet the British certification condition in the completion period, it is no longer to be regarded as having met the condition (nor, therefore, as being a qualifying film or qualifying television programme) in any pre-completion period.

(6) If a certificate is revoked after the production company’s company tax return for a period is submitted, the film or programme in question is no longer to be regarded as having met the British certification condition (nor, therefore, as being a qualifying film or qualifying television programme) in that period in reliance on that certificate.

(7) Subsection (6) does not apply to the extent that a direction under paragraph 3 of Schedule 1 to the Films Act 1985 or section 1179DM provides that the certificate is to be treated as having effect.

(8) For the purposes of this section, a certificate is valid if it has effect on the day on which the production company’s company tax return is submitted.

1179DK

(1) The Secretary of State, with the approval of the Treasury, may by regulations specify conditions which must be met by a television programme before it may be certified as a British programme.

(2) Such regulations may—

(a) specify different conditions in relation to different descriptions of programme;

(b) provide that certain descriptions of programme may not be certified as a British programme;

(c) enable the Secretary of State to direct that any provision made by virtue of paragraph (b) does not apply to a programme that meets certain conditions.

1179DL

(1) The production company for a television programme may apply to the Secretary of State for a certificate under section 1179DM in relation to the programme.

(2) An application may be for an interim certificate or a final certificate.

(3) An interim certificate is a certificate that—

(a) is granted before the programme is completed (see section 1179EB), and

(b) states that the programme, if completed in accordance with the proposals set out in the application, will be a British programme.

(4) A final certificate is a certificate that—

(a) is granted after the programme is completed, and

(b) states that the programme is a British programme.

(5) The Secretary of State may require an applicant to provide documents or information to assist the Secretary of State in determining the application.

(6) The Secretary of State may require information provided for the purposes of an application to be accompanied by a statutory declaration, made by the person providing it, as to the truth of the information.

(7) The Secretary of State may by regulations make provision supplementing this section, including—

(a) provision about the form of applications,

(b) provision about the particulars and evidence necessary for satisfying the Secretary of State that a programme meets any conditions that apply by virtue of section 1179DK, and

(c) provision that any statutory declaration which is required by subsection (6) to be made by any person may be made on the person’s behalf by such person as is specified in the regulations.

1179DM

(1) If—

(a) an application is made in accordance with section 1179DL, and

(b) the Secretary of State is satisfied that the television programme concerned meets any conditions that apply by virtue of section 1179DK,

the Secretary of State must certify the programme accordingly.

(2) An interim certificate—

(a) may be given subject to conditions, and (unless the Secretary of State directs otherwise) is of no effect if the conditions are not met, and

(b) may be expressed to expire after a specified period, and (unless the Secretary of State directs otherwise) ceases to have effect at the end of that period.

(3) If it appears to the Secretary of State that a film or television programme certified under this section ought not to have been certified, the Secretary of State may revoke the certificate.

(4) Unless the Secretary of State directs otherwise, a certificate that is revoked is treated as never having had effect.

1179DN

(1) Section 18(1) of the Commissioners for Revenue and Customs Act 2005 (restriction on disclosure by Revenue and Customs officials) does not prevent disclosure to the Secretary of State for the purposes of the Secretary of State’s functions under—

(a) Schedule 1 to the Films Act 1985, or

(b) sections 1179DJA to 1179DM.

(2) Information disclosed to the Secretary of State for those purposes may be disclosed by the Secretary of State to the British Film Institute.

(3) The Treasury may by regulations amend subsection (2)—

(a) so as to substitute for the person or body specified in that subsection a different person or body, or

(b) in consequence of a change in the name of the person or body so specified.

(4) A person to whom information is disclosed under subsection (1) or (2) may not otherwise disclose it except—

(a) for the purposes of the Secretary of State’s functions under the provisions referred to in subsection (1),

(b) if the disclosure is authorised by an enactment,

(d) for the purposes of a criminal investigation or legal proceedings (whether criminal or civil) connected with the operation of this Part or Schedule 1 to the Films Act 1985,

(e) with the consent of the Commissioners for His Majesty’s Revenue and Customs, or

(f) with the consent of each person to whom the information relates.

(5) Section 19 of the Commissioners for Revenue and Customs Act 2005 (offence of unlawful disclosure of revenue and customs information) applies in relation to a contravention of subsection (4) as it applies in relation to a contravention of the provisions referred to in subsection (1) of that section.

UK expenditure condition

1179DO

(1) A film or television programme meets the UK expenditure condition in a pre-completion period (see section 1179DY) if—

(a) the production company’s company tax return for the period states—

(i) the total amount of core expenditure that is expected to be incurred in relation to the film or programme, and

(ii) the amount of that expenditure that is expected to be UK expenditure, and

(b) the second of those amounts is at least 10% of the first.

(2) A film or television programme meets the UK expenditure condition in the completion period (see section 1179DY) and any subsequent accounting period if—

(a) the production company’s company tax return for the completion period states—

(i) the total amount of core expenditure that has been incurred in relation to the film or programme, and

(ii) the amount of that expenditure that is UK expenditure, and

(b) the second of those amounts is at least 10% of the first.

(3) Subsection (1) is subject to subsections (4) and (5).

(4) If a film or television programme does not meet the UK expenditure condition in a pre-completion period, it is no longer to be regarded as having done so (nor, therefore, as being a qualifying film or qualifying television programme) in any previous accounting period by virtue of subsection (1) as it applies to that previous period.

(5) If a film or television programme does not meet the UK expenditure condition in the completion period, it is no longer to be regarded as having done so (nor, therefore, as being a qualifying film or qualifying television programme) in any pre-completion period.

(6) References in this section to core expenditure are to core expenditure incurred—

(a) in the case of a film or programme other than a qualifying co-production, by the production company, or

(b) in the case of a qualifying co-production, by the co-producers.

(7) The Treasury may by regulations amend the percentage specified in subsection (1) or (2).

Production companies

1179DP

(1) A company is the production company for a film or television programme that is not a qualifying co-production if—

(a) it is responsible for—

(i) pre-production, principal photography and post-production of the film or programme, and

(ii) delivery of the film or programme in completed form,

(b) it is actively engaged in production planning and decision-making during pre-production, principal photography and post-production,

(d) it is more directly engaged in the matters described in paragraphs (a) to (c), taken as a whole, than any other company that satisfies those paragraphs.

(2) A company is the production company for a film or television programme that is a qualifying co-production if—

(a) the company is a co-producer of the co-production,

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