Finance Act 2024

Part 2 — Amendments consequential on Part 1

Films Act 1985

2

• (1) The Films Act 1985 is amended as follows.

• (2) In section 6 (certification of British films), after “purposes of” insert “audiovisual expenditure credit and”.

• (3) In Schedule 1 (certification of British films)—

• (a) in the heading, after “purposes of” insert “audiovisual expenditure credit and”;

• (b) in paragraph 1(1), for the definition of “film production company” substitute—

• “film production company”, in relation to a film, means a company that is the production company for the film for the purposes of Part 14A of the Corporation Tax Act 2009 (see section 1179DP of that Act) or the film production company in relation to the film for the purposes of Part 15 of that Act (see section 1182 of that Act).

FA 1998

3

• (1) Schedule 18 to FA 1998 (company tax returns etc) is amended as follows.

• (2) In paragraph 10 (certain claims and elections to be included in tax return)—

• (a) in sub-paragraph (4), for the words from “for” to “or” substitute “under Parts 14A to”;

• (b) after sub-paragraph (4) insert—

(4A) An election under section 1179B of the Corporation Tax Act 2009 (opting into Part 14A of that Act) can only be made by being included in a company tax return.

• (3) In the heading of Part 9D, for the words from “for” to “or” substitute “under Parts 14A to”.

• (4) In paragraph 83S (application of Part 9D), for “the following reliefs—” substitute “—

(za) audiovisual expenditure credit or video game expenditure credit,

.

FA 2007

4

In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa) (meaning of “corporation tax credit”), before paragraph (iv) insert—

(iiia) an audiovisual expenditure credit or video game expenditure credit under Chapter 3 of Part 14A of CTA 2009 (expenditure credit in respect of films, television programmes and video games),

.

CTA 2009

5

• (1) CTA 2009 is amended as follows.

• (2) For sections 808 to 808E substitute—

(807A) This Part does not apply to an intangible fixed asset held by a company treated as carrying on a separate trade under any of Parts 14A to 15E (production of films, television programmes, video games, theatrical productions, orchestral concerts and museum and gallery exhibitions), so far as the asset represents expenditure of that separate trade.

• (3) In section 1040ZA (restrictions on claiming other reliefs where R&D relief given), before subsection (1) insert—

(A1) For provision prohibiting audiovisual expenditure credit or video game expenditure credit being given where relief is available under this Part, see sections 1179DT and 1179FL.

• (4) In Schedule 4 (index of defined expressions), at the appropriate places insert—

accounting period (in Part 14A)	sections 1179DY(1) (in relation to films and television programmes) and 1179FQ(1) (in relation to video games)

;

animation (in Part 14A)	section 1179EA(3)

;

audiovisual expenditure credit	section 1179D(3)

;

company tax return (in Part 14A)	section 1179AC

;

completed (in Part 14A)	sections 1179EB (in relation to films and television programmes) and 1179FS (in relation to video games)

;

completion period (in Part 14A)	sections 1179DY(2) (in relation to films and television programmes) and 1179FQ(2) (in relation to video games)

;

co-producer (of a qualifying co-production) (in Part 14A)	section 1179DQ

;

core expenditure	sections 1179DS (in relation to films and television programmes) and 1179FK (in relation to video games)

;

development activities	section 1179FR

;

development company (in Part 14A)	section 1179FI

;

film (in Part 14A)	section 1179DA

;

group (in Part 14A)	section 1179AD

;

opt-in period (in Part 14A)	section 1179B(3)

;

pre-completion period (in Part 14A)	sections 1179DY(4) (in relation to films and television programmes) and 1179FQ(4) (in relation to video games)

;

principal photography (in Part 14A)	section 1179EA(2)

;

production (in Part 14A)	section 1179AA(9)

;

production activities (in Part 14A)	section 1179EA(1)

;

production company (in Part 14A)	section 1179DP

;

qualifying company (in Part 14A)	sections 1179D(1) (in relation to films and television programmes) and 1179F(1) (in relation to video games); and see also section 1179BA(5)

;

qualifying co-production (in Part 14A)	section 1179DQ

;

qualifying film (in Part 14A)	section 1179DB

;

qualifying production (in Part 14A)	sections 1179D(1) (in relation to films and television programmes) and 1179F(1) (in relation to video games); and see also section 1179BA(5)

;

qualifying television programme (in Part 14A)	section 1179DE

;

qualifying video game (in Part 14A)	section 1179FA

;

the separate production trade (in Part 14A)	section 1179B(3)

;

television programme (in Part 14A)	section 1179DD

;

UK expenditure (in Part 14A)	section 1179AB

;

video game expenditure credit	section 1179F(3)

.

CTA 2010

6

• (1) CTA 2010 is amended as follows.

• (2) In section 45A(3) (conditions for carrying forward trade loss against total profits), in paragraph (b)(ii), after “section” insert “1179BF,”.

• (3) In Part 8A (profits from exploiting patents etc)—

• (a) in section 357BJB (deductions that are not routine deductions in calculating relevant IP profits)—

• (i) in subsection (1), after paragraph (d) insert—

(da) subsection (7A) (expenditure on the production of films, television programmes and video games),

;

• (ii) after subsection (7) insert—

(7A) Head 4A is the amount of any expenditure in respect of which the company is entitled to an audiovisual expenditure credit or video game expenditure credit under Part 14A of CTA 2009.

;

• (b) in section 357CG (adjustments in calculating relevant IP profits), in subsection (4), after paragraph (a) (but not the following “and”) insert—

(aa) the amount of any audiovisual expenditure credit or video game expenditure credit under Part 14A of CTA 2009 brought into account in calculating the profits of the trade for the accounting period,

.

• (4) In Part 8B (profits taxable at Northern Ireland rate), after Chapter 10 insert—

(357QE) (1) This Chapter makes provision about the interaction between this Part and Part 14A of CTA 2009 (films, television programmes and video games). (2) This Chapter applies if— (a) a company is a Northern Ireland company in an accounting period, (b) the company is treated under Part 14A of CTA 2009 as carrying on a separate trade in that period (see 1179B of that Act), and (c) that trade is a qualifying trade. (3) References in this Chapter to “the Northern Ireland company”, “the accounting period” and “the separate trade” are to be read accordingly. (357QF) (1) Subsection (2) applies if, under section 1179CB of CTA 2009 (expenditure credit under Part 14A of CTA 2009 to be taxable receipt), the Northern Ireland company brings an amount of audiovisual expenditure credit or video game expenditure credit into account in calculating the profits of the separate trade for the accounting period. (2) The amount is to form part of the mainstream profits or mainstream losses of the trade for that period. (357QG) (1) If the accounting period is a pre-completion period within the meaning of section 1179BF of CTA 2009 (carrying forward of production losses in separate trade), that section applies in relation to the separate trade and that accounting period subject to the following provisions. (2) In subsection (1) of that section, the reference to a loss is to be read as a reference to— (a) any Northern Ireland losses, or (b) any mainstream losses; and the rest of that section is to be read accordingly. (3) Subsection (4) applies if the Northern Ireland company has in the accounting period— (a) both Northern Ireland losses of the separate trade and mainstream profits of that trade, or (b) both mainstream losses of the separate trade and Northern Ireland profits of that trade. (4) The company may, despite section 1179BF(2) of CTA 2009, claim under section 37 (relief for trade losses against total profits) for— (a) relief for those Northern Ireland losses against those mainstream profits, or (b) relief for those mainstream losses against those Northern Ireland profits. (357QH) (1) Subsection (2) applies if— (a) the Northern Ireland company ceases to carry on the separate trade in the accounting period, (b) as a result, section 1179BG of CTA 2009 (transfer of terminal loss in separate production trade to other production or group company) applies, and (c) the amount in respect of which it applies (see subsection (1)(b) of that section) represents a Northern Ireland loss. (2) The references to a loss in subsections (2) and (3)(b) of that section are to be read as references to a Northern Ireland loss.

Part 3 — Repeal of existing regimes for films, television programmes and video games

7

In CTA 2009, omit Parts 15 to 15B.

Part 4 — Amendments consequential on Part 3

Films Act 1985

8

• (1) The Films Act 1985 is amended as follows.

• (2) In section 6 (certification of British films) (as amended by paragraph 2), omit “and film tax relief”.

• (3) In Schedule 1 (certification of British films) (as amended by paragraph 2)—

• (a) in the heading, omit “and film tax relief”;

• (b) in paragraph 1(1), in the definition of “film production company”, omit the words from “or” to the end.

ICTA

9

• (1) Section 826 of ICTA (interest on tax overpaid) is amended as follows.

• (2) In subsection (1), omit paragraphs (f) to (fb).

• (3) In subsection (3C), omit “film tax credit, television tax credit, video game tax credit,”.

• (4) In subsection (8A)(b)(ii), omit “or film tax credit or television tax credit or video game tax credit”.

• (5) In subsection (8BA), omit “or film tax credit or television tax credit or video game tax credit” in both places those words occur.

FA 1998

10

• (1) Schedule 18 to FA 1998 (company tax returns etc) is amended as follows.

• (2) In paragraph 10 (certain claims and elections to be included in tax return), omit sub-paragraphs (5) to (7).

• (3) In paragraph 52 (recovery of excessive payments), in sub-paragraph (2B) (inserted by Schedule 6), omit paragraphs (b) to (d).

• (4) In paragraph 83S (application of Part 9D), omit sub-paragraphs (a) to (c).

FA 2007

11

In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa) (meaning of “corporation tax credit”), omit paragraphs (iv) to (ivb).

CTA 2009

12

• (1) CTA 2009 is amended as follows.

• (2) In section 1040ZA (restrictions on claiming other reliefs where R&D relief given), omit subsections (1) to (3).

• (3) In section 1310(4) (orders and regulations subject to affirmative procedure), omit paragraphs (a) to (ej).

• (4) In Schedule 4 (index of defined expressions), omit the following entries—

• company tax return (in Part 15)

;

• company tax return (in Part 15A)

;

• company tax return (in Part 15B)

;

• the completion period (in Chapter 5 of Part 15)

;

• the completion period (in Chapter 5 of Part 15A)

;

• the completion period (in Chapter 5 of Part 15B)

;

• co-producer (in Part 15)

;

• co-producer (in Part 15A)

;

• core expenditure (in Part 15)

;

• core expenditure (in Part 15A)

;

• core expenditure (in Part 15B)

;

• costs of the film (in Chapter 2 of Part 15)

;

• costs of the relevant programme (in Chapter 2 of Part 15A)

;

• costs of the video game (in Chapter 2 of Part 15B)

;

• European expenditure (in Part 15B)

;

• film (in Part 15)

;

• film-making activities (in Part 15)

;

• film production company (in Part 15)

;

• film tax relief (in Part 15)

;

• final certificate (in Chapter 5 of Part 15)

;

• final certificate (in Chapter 5 of Part 15A)

;

• final certificate (in Chapter 5 of Part 15B)

;

• income from the film (in Chapter 2 of Part 15)

;

• income from the relevant programme (in Chapter 2 of Part 15A)

;

• income from the video game (in Chapter 2 of Part 15B)

;

• interim accounting period (in Chapter 5 of Part 15)

;

• interim accounting period (in Chapter 5 of Part 15A)

;

• interim accounting period (in Chapter 5 of Part 15B)

;

• principal photography (in Part 15)

;

• principal photography (in Part 15A)

;

• production expenditure (in Part 15)

;

• production expenditure (in Part 15A)

;

• qualifying co-production (in Part 15)

;

• qualifying co-production (in Part 15A)

;

• qualifying expenditure (in Chapter 3 of Part 15)

;

• qualifying expenditure (in Chapter 3 of Part 15A)

;

• qualifying expenditure (in Chapter 3 of Part 15B)

;

• relevant programme (in Part 15A)

;

• the separate film trade (in Chapters 2, 3 and 5 of Part 15)

;

• the separate programme trade (in Chapters 2, 3 and 5 of Part 15A)

;

• the separate video game trade (in Chapters 2, 3 and 5 of Part 15B)

;

• special film relief (in Chapter 5 of Part 15)

;

• special television relief (in Chapter 5 of Part 15A)

;

• special video games relief (in Chapter 5 of Part 15B)

;

• television production activities (in Part 15A)

;

• television production company (in Part 15A)

;

• television programme (in Part 15A)

;

• television tax relief (in Part 15A)

;

• UK expenditure (in Part 15)

;

• UK expenditure (in Part 15A)

;

• video game (in Part 15B)

;

• video games development activities (in Part 15B)

;

• video games development company (in Part 15B)

;

• video games tax relief (in Part 15B)

.

FA 2009

13

In paragraph 2 of Schedule 54A to FA 2009 (amounts of overpaid repayment interest recoverable as late payment interest), omit paragraphs (e) to (g).

CTA 2010

14

• (1) CTA 2010 is amended as follows.

• (2) In section 45A(3) (conditions for carrying forward trade loss against total profits), in paragraph (b)(ii), omit “1209, 1216DA, 1217DA,”.

• (3) In section 45B(1) (cases in which trade loss carried forward against trade profits)—

• (a) in paragraph (d), omit “, 2”;

• (b) omit Case 2.

• (4) In section 357BI (excluded debits under Part 8A), omit paragraphs (c) and (d) (but not the following “and”).

• (5) In section 357BJB (deductions that are not routine deductions under Part 8A), omit subsections (1)(e) and (f), (8) and (9).

• (6) In section 357CG (adjustments in calculating relevant IP profits under Part 8A)—

• (a) in subsection (3), omit paragraphs (c) and (d);

• (b) omit subsection (5A);

• (c) in subsection (6)—

• (i) for “subsections (5) and (5A)” substitute “subsection (5)”;

• (ii) omit the following definitions—

• qualifying expenditure

;

• the separate programme trade

;

• the separate video game trade

;

• television production company

;

• theatrical production

;

• video games development company

.

• (7) Omit section 357CHA (deemed shortfall in television or video game expenditure for purposes of adjusting relevant IP profits).

• (8) In Part 8B (profits taxable at Northern Ireland rate), omit Chapters 11 to 13.

FA 2016

15

In Schedule 24 to FA 2016 (tax advantages constituting the grant of state aid), in Part 1, in the table headed “Creative tax reliefs”, omit the entries for film tax relief, television tax reliefs and video games tax relief.

Part 5 — Commencement and transitional provision

General commencement

16

• (1) No election under section 1179B(1) of CTA 2009 may be made in a company tax return for an accounting period ending before 1 January 2024.

• (2) The amendments made by Parts 3 and 4 of this Schedule have effect in relation to accounting periods beginning on or after 1 April 2027.

Closure of existing regimes to new productions

17

A company is not to be treated as carrying on a separate trade under Part 15, 15A or 15B of CTA 2009 if the trade would be treated under that Part as beginning on or after 1 April 2025.

Opting into new regime during transitional period

18

• (1) If a company makes an election under section 1179B(1) of CTA 2009 in its company tax return for an accounting period beginning before 1 January 2024—

• (a) Part 14A of CTA 2009 applies further to that election only in respect of the portion of the accounting period that falls on or after that date, and

• (b) the relevant existing regime applies in respect of the portion of the accounting period that falls before that date.

• (2) If a company makes an election under section 1179B(1) of CTA 2009 in its company tax return for an accounting period beginning on or after 1 January 2024, the relevant existing regime does not apply in relation to that accounting period or any subsequent accounting period, subject to sub-paragraphs (3) and (4).

• (3) If a company makes an election under section 1179B(1) of CTA 2009 in its company tax return for an accounting period beginning on or before but ending after the relevant closure date, it may further elect in the return for sub-paragraph (4) to apply.

• (4) If it does so—

• (a) Part 14A of CTA 2009 applies further to the election under section 1179B(1) of CTA 2009 only in respect of the portion of the accounting period that falls after the relevant closure date, and

• (b) the relevant existing regime applies in respect of the portion of the accounting period that falls on or before that date.

• (5) Where, by virtue of this paragraph, different Parts of CTA 2009 apply in respect of different portions of an accounting period, the portions are to be treated as separate accounting periods for the purposes of—

• (a) those Parts, and

• (b) paragraphs 19 to 24 (but not for other corporation tax purposes).

• (6) For the purposes of this paragraph—

• (a) the “relevant existing regime” means—

• (i) Part 15 of CTA 2009, if the election under section 1179B(1) of that Act relates to a film;

• (ii) Part 15A of CTA 2009, if the election under section 1179B(1) of that Act relates to a television programme;

• (iii) Part 15B of CTA 2009, if the election under section 1179B(1) of that Act relates to a video game;

• (b) references to the application of the relevant existing regime are to its application in relation to that film, television programme or video game;

• (c) the “relevant closure date” is—

• (i) 31 March 2025, in the case of a film or television programme whose principal photography has not begun, or a video game whose production has not begun, by the end of that date;

• (ii) 31 March 2027, in any other case.

• (7) Nothing in this paragraph expands the circumstances in which the relevant existing regime can apply (except by making it apply in respect of a portion of an accounting period).

Productions not moving into new regime

19

• (1) Sub-paragraphs (2) and (3) apply if, but for this paragraph, Part 15, 15A or 15B of CTA 2009 would apply to a company in relation to a film, television programme or video game in respect of an accounting period beginning on or before but ending after the relevant closure date.

• (2) The company is to be treated for the purposes of the Part in question as if, at the end of the relevant closure date, it—

• (a) ceased the separate trade that it is treated as carrying on under that Part, and

• (b) abandoned its activities in relation to the film, television programme or video game.

• (3) No election under section 1179B(1) of CTA 2009 may be made in relation to the film, television programme or video game.

• (4) The date that is the relevant closure date for the purposes of paragraph 18 is also the relevant closure date for the purposes of this paragraph.

Continuity between regimes: taxation as separate trade

20

• (1) Sub-paragraphs (2) to (5) apply if—

• (a) a company is treated as carrying on a separate trade under Part 15, 15A or 15B of CTA 2009 in an accounting period (“AP1”),

• (b) in the next accounting period (“AP2”), the company is treated as carrying on a separate trade under Part 14A of CTA 2009, and

• (c) both trades relate to the same film, television programme or video game.

• (2) The separate trade that the company is treated as carrying on in AP2 is to be treated as a continuation of the separate trade that the company was treated as carrying on in AP1.

• (3) Accordingly, section 1179BA(2) of CTA 2009 does not apply.

• (4) If a new period of account does not begin when AP2 begins, a new period of account is to be treated as beginning at that time for the purposes of—

• (a) section 1189, 1216BA or 1217BA of CTA 2009 (as it applies in relation to AP1), and

• (b) section 1179BB of CTA 2009 (as it applies in relation to AP2).

• (5) For the purposes of section 1179BB(3) of CTA 2009 as it applies in relation to AP2, the references to the corresponding amounts for the previous period are to be read as references to the corresponding amounts brought into account under section 1189, 1216BA or 1217BA of that Act for AP1.

Continuity between regimes: calculation of expenditure credit

21

• (1) Sub-paragraphs (3) and (4) apply if—

• (a) a company is entitled to audiovisual expenditure credit or video game expenditure credit under Chapter 3 of Part 14A of CTA 2009 for an accounting period, and

• (b) in respect of an earlier accounting period, the company was entitled to, and claimed—

• (i) film tax relief under Chapter 3 of Part 15 of CTA 2009,

• (ii) television tax relief under Chapter 3 of Part 15A of that Act, or

• (iii) video games tax relief under Chapter 3 of Part 15 of that Act, and

• (c) both entitlements relate to the same film, television programme or video game.

• (2) In those sub-paragraphs, the earliest accounting period within sub-paragraph (1)(a) is “AP2” and the latest accounting period within sub-paragraph (1)(b) is “AP1”.

• (3) For the purposes of step 1 in section 1179CA(1) of CTA 2009 as it applies in relation to AP2, the reference to relevant global expenditure includes the amount that was “qualifying expenditure incurred to date” for the purposes of section 1200(1) or (2), 1216CG(1) or (2) or 1217CG(1) or (2) of that Act in relation to AP1.

• (4) For the purposes of step 4 in section 1179CA(1) of CTA 2009 as it applies in relation to AP2, the reference to the company’s qualifying expenditure to date in the accounting period for which it was last entitled to, and claimed, an expenditure credit is to be read as a reference to the amount taken as ‘E’ for the purposes of section 1200(1) or (2), 1216CG(1) or (2) or 1217CG(1) or (2) of that Act in relation to AP1.

Continuity between regimes: British certification

22

• (1) Regulations made before the passing of this Act under a provision of CTA 2009 specified in the first column of the following table—

• (a) have effect for the purposes of Part 14A of CTA 2009 as if made under the provision of that Part specified in the corresponding entry in the second column of the table, and

• (b) are for those purposes to be read subject to any necessary modifications.

Existing provision in Part 15A or 15B of CTA 2009	New provision in Part 14A of CTA 2009
Section 1216CB(2)	Section 1179DK(1)
Section 1216CC(7)	Section 1179DL(7)
Section 1217CB(2)	Section 1179FD(1)
Section 1217CC(7)	Section 1179FE(7)

• (2) A certificate issued under section 1216CD or 1217CD of CTA 2009 continues to have effect for the purposes of Part 14A of that Act as if it were a certificate issued under section 1179DM or (as the case may be) 1179FF in that Part.

• (3) In relation to such a certificate, the references to revocation or ceasing to be in force in sections 1216EA and 1217EA of CTA 2009 (as they continue to apply in relation to accounting periods beginning before 1 April 2027) include revocation or ceasing to be in force under section 1179DM or (as the case may be) 1179FF of that Act.

• (4) The repeal of Parts 15, 15A and 15B of CTA 2009 does not affect the requirement in section 1213(3), 1216EA(3) or 1217EA(3) of that Act so far as it relates to entitlements in accounting periods beginning before 1 April 2027 (even if the “completion period” begins on or after that date).

• (5) In sections 1216EA(3) and (5) and 1217EA(3) and (5) of CTA 2009 (as they continue to apply in relation to accounting periods beginning before 1 April 2027), the references to a final certificate include reference to a final certificate issued under section 1179DM or (as the case may be) 1179FF of that Act.

Continuity between regimes: UK expenditure (films and television programmes)

23

The repeal of Parts 15 and 15A of CTA 2009 does not affect the requirement in section 1214(3) or 1216EB(3) of that Act, so far as it relates to entitlements in accounting periods beginning before 1 April 2027 (even if the “completion period” begins on or after that date).

Transition of video games from European expenditure condition to UK expenditure condition

24

• (1) Sub-paragraphs (3) and (4) apply if—

• (a) a company makes an election under section 1179B(1) in relation to a video game in its company tax return for an accounting period (“the opt-in period”),

• (b) no earlier accounting period was the completion period, and

• (c) in an earlier accounting period, the company was entitled to, and claimed, special video games relief in respect of that video game.

• (2) In this paragraph, “special video games relief” and “completion period” have the meanings given by section 1217E(1) of CTA 2009.

• (3) Subsections (3) and (4) of section 1217EB of CTA 2009 apply as if the video game had been completed at the end of the accounting period preceding the opt-in period (and, accordingly, as if that period were the completion period).

• (4) In section 1179FH of CTA 2009 as it applies in relation to the video game, the references to core expenditure are to be read as limited to core expenditure incurred in or after the opt-in period.

Transfer of terminal losses between productions in existing and new regimes

25

• (1) In section 1179BG(1)(a) of CTA 2009, the reference to the separate production trade is to be read as including reference to a separate trade carried on under Part 15, 15A or 15B of CTA 2009.

• (2) Section 1179BG(1)(d) of CTA 2009 is to be taken as satisfied where—

• (a) the ceased trade was carried on under Part 15 or 15A of CTA 2009 and the other trade relates to a film or television programme, or

• (b) the ceased trade was carried on under Part 15B of CTA 2009 and the other trade relates to a video game.

• (3) Paragraphs (a) and (b) of section 1211(1) of CTA 2009 are to be taken as satisfied where a company ceases to carry on a separate production trade under Part 14A of CTA 2009 in relation to a film (and that company and that trade are respectively “company A” and “trade X” in the resulting application of section 1211).

• (4) Paragraphs (a) and (b) of section 1216DC(1) of CTA 2009 are to be taken as satisfied where a company ceases to carry on a separate production trade under Part 14A of CTA 2009 in relation to a television programme (and that company and that trade are respectively “company A” and “trade X” in the resulting application of section 1216DC).

• (5) Paragraphs (a) and (b) of section 1217DC(1) of CTA 2009 are to be taken as satisfied where a company ceases to carry on a separate production trade under Part 14A of CTA 2009 in relation to a video game (and that company and that trade are respectively “company A” and “trade X” in the resulting application of section 1217DC).

Schedule 3

Part 1 — Amendments of Part 15C of CTA 2009

Introduction

1

Part 15C of CTA 2009 (theatrical productions) is amended as follows.

Meaning of “theatrical production”

2

• (1) Section 1217FA (meaning of “theatrical production”) is amended as follows.

• (2) In subsection (2)—

• (a) in the words before paragraph (a), for “relevant” substitute “other”;

• (b) for paragraph (a) substitute—

(a) the primary focus of the play, opera, musical or dramatic piece is the depiction of a story, or a number of related or unrelated stories, through the playing of roles by performers (whether actors, singers, dancers or others),

;

• (c) after paragraph (ba) (but before the following “and”) insert—

(bb) it is reasonable to expect that the main purpose of the audience members will be to observe the performance (rather than, for example, to undertake tasks facilitated or accompanied by the performance),

.

• (3) Omit subsection (3A).

• (4) Those amendments have effect in relation to a theatrical production the production phase of which begins on or after 1 April 2024.

Meaning of “core expenditure”

3

• (1) In section 1217GC(2) (expenditure that is not “core expenditure” on theatrical production), in paragraph (a), for “or storage” substitute “, storage, or the provision of incidental goods or services to members of the audience”.

• (2) That amendment has effect in relation to expenditure incurred on or after 1 April 2024.

Provision to emphasise that capital expenditure does not generally qualify for relief

4

In section 1217IC (costs of theatrical production), in subsection (3), at the end insert—

(As to other capital expenditure, see section 53 and subsection (2).)

UK expenditure threshold to replace EEA expenditure threshold

5

• (1) In section 1217GB (European expenditure condition)—

• (a) in the heading, for “European” substitute “UK”;

• (b) in subsection (1)—

• (i) for “European” (in both places it occurs) substitute “UK”;

• (ii) for “25%” substitute “10%”;

• (c) for subsection (2) substitute—

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

;

• (d) in subsection (3), for “European and non-European expenditure” substitute “expenditure that is and is not UK expenditure”;

• (e) in subsection (5), for “European” substitute “UK”.

• (2) In each of the following provisions, for “European” (in each place it occurs) substitute “UK”—

• (a) section 1217G(1)(b) (conditions for production to qualify for relief);

• (b) section 1217N(2) (provisional satisfaction of European expenditure condition);

• (c) section 1217NA(1), (2) and (3) (European expenditure condition provisionally satisfied not later satisfied).

• (3) In section 1217OB (defined terms)—

• (a) omit the definitions of “European expenditure” and “European expenditure condition”;

• (b) at the end insert—

• “UK expenditure” has the meaning given by section 1217GB;
• “UK expenditure condition” has the meaning given by section 1217GB.

• (4) In Schedule 4 (index of defined expressions)—

• (a) omit the entries for “European expenditure (in Part 15C)” and “European expenditure condition (in Part 15C)”;

• (b) at the appropriate places insert—

UK expenditure (in Part 15C)	section 1217GB(2)

;

UK expenditure condition (in Part 15C)	section 1217GB(1)

.

• (5) For transitional provision in relation to this paragraph, see paragraph 11.

EEA expenditure not to qualify for relief

6

• (1) In section 1217J(2) and (3) (amount of relief for theatrical production), for “European” substitute “UK”.

• (2) For transitional provision in relation to this paragraph, see paragraph 12.

Profit element of non-arm's-length payments to connected parties not to qualify for relief

7

• (1) Section 1217JA (expenditure on theatrical productions that qualifies for relief) is amended as follows.

• (2) In subsection (1)(b), after “(2)” insert “or (3)”.

• (3) After subsection (2) insert—

(3) Expenditure is excluded to the extent that it represents connected party profit, unless subsection (5) applies. (4) For the purposes of subsection (3), expenditure represents connected party profit— (a) if it is a payment to a person (“C”) in exchange for something supplied by that person, (b) if the company is connected with C, and (c) if, and to the extent that, the amount of the payment exceeds the expenditure incurred by C in supplying that thing. (5) This subsection applies if the amount of the payment is no more than would have been the case had the transaction been entered into at arm’s length. (6) A transaction would have been entered into “at arm’s length” if it made “the arm’s length provision” within the meaning of Part 4 of TIOPA 2010 (and for this purpose any limitation on the application of that Part is to be disregarded). (7) Subsections (8) and (9) apply if— (a) the supply by C to the production company is one of a sequence of transactions in which the thing supplied has been supplied by one person to another, and (b) either— (i) each transacting party in the sequence is connected to at least one other transacting party in the sequence, or (ii) each transaction in the sequence is entered into in furtherance of a single scheme or arrangement (of whatever kind, and whether or not legally enforceable). (8) The reference to C in subsection (4)(c) is to be read as a reference to the supplier in the first transaction in the sequence. (9) The reference to the transaction in subsection (5) is to be read as including each transaction in the sequence. (10) In this section, “payment” includes any transfer of value.

• (4) Those amendments have effect in relation to expenditure incurred on or after 1 April 2024.

Amendment of R&D exclusion

8

• (1) In section 1217JA (expenditure qualifying for theatre relief), for subsection (2) substitute—

• (a) in paragraph (a), for “is entitled to” substitute “would be able to claim”;

• (b) in paragraph (b), for “has obtained” substitute “would be able to claim”.

• (2) Those amendments have effect in relation to expenditure incurred on or after 1 April 2024.

Restriction where tax liabilities outstanding: meaning of “payment period”

9

In section 1217KB (payment in respect of theatre tax credit), after subsection (4) insert—

(4A) For the purposes of subsection (4), 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.

Relief not to be available for companies in insolvency

10

• (1) After section 1217KC insert—

(1217KD) (1) A company may not make a claim under section 1217H or section 1217K at a time when it 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.

• (2) That amendment has effect in relation to claims made on or after 1 April 2024.

Part 2 — Changes from European to UK expenditure: transitional provision

Transitional provision in relation to paragraph 5

11

• (1) This paragraph makes transitional provision in connection with paragraph 5.

• (2) The amendments made by that paragraph do not apply in relation to a theatrical production if—

• (a) it has entered production before 1 April 2024, and

• (b) the separate theatrical trade in respect of it ceases before 1 April 2025.

• (3) Sub-paragraph (4) applies if—

• (a) a theatrical production has entered production before 1 April 2024,

• (b) the separate theatrical trade in respect of the production continues on or after 1 April 2025,

• (c) the production company’s company tax return for the first accounting period that ends on or after 1 April 2025 is accompanied by a statement of the amount of the core expenditure on the theatrical production incurred before 1 April 2025 that is European expenditure, and

• (d) that statement shows that, in respect of core expenditure incurred before 1 April 2025, the European expenditure condition is met.

• (4) The company’s entitlement to—

• (a) an additional deduction under section 1217H of CTA 2009, or

• (b) a tax credit under section 1217K of that Act,

is unaffected by a failure to meet the UK expenditure condition so far as the entitlement derives from expenditure incurred before 1 April 2025.

• (5) For the purposes of sub-paragraph (4), an entitlement to a tax credit under section 1217H of CTA 2009 derives from expenditure incurred before 1 April 2025 to the extent that it would arise if only costs incurred and income received before that date were taken into account in calculating the surrenderable loss of the company for the purposes of section 1217KA of that Act.

• (6) Sub-paragraph (7) applies in relation to a theatrical production in respect of which the separate theatrical trade continues on or after 1 April 2025.

• (7) The reference in section 1217NA(1) of CTA 2009, as amended by paragraph 5, to a statement having been made under section 1217N(2) of that Act includes reference to a statement having been made in relation to the European expenditure condition under that provision before it was amended by paragraph 5.

• (8) But the application of section 1217NA(1) of CTA 2009 as so amended is subject to sub-paragraph (4) (where that sub-paragraph applies).

• (9) In this paragraph—

• “theatrical production”, “separate theatrical trade”, “production company” and “core expenditure” have the same meanings as in Part 15C of CTA 2009;

• “UK expenditure condition” has the same meaning as in that Part after the amendments made by paragraph 5;

• “European expenditure” and “European expenditure condition” have the same meanings as in that Part before the amendments made by paragraph 5.

• (10) For the purposes of this paragraph, a theatrical production “enters production” when core expenditure is first incurred on it.

Transitional provision in relation to paragraph 6

12

• (1) This paragraph makes transitional provision in relation to paragraph 6.

• (2) The amendments made by that paragraph have effect in relation to accounting periods ending on or after 1 April 2024.

• (3) Sub-paragraph (4) applies in a case where expenditure incurred before 1 April 2024 is to be taken into account as qualifying expenditure for the purposes of section 1217J of CTA 2009 (amount of relief for theatrical production).

• (4) The references in subsections (2) and (3) of that section (as amended by paragraph 6) to so much of the qualifying expenditure incurred to date as is UK expenditure are to be read as references to so much of the qualifying expenditure incurred to date as—

• (a) has been incurred before 1 April 2024 and is European expenditure, or

• (b) has been incurred on or after that date and is UK expenditure.

• (5) But if the theatrical production in relation to which sub-paragraph (4) applies has entered production before 1 April 2024, the production company may elect for that sub-paragraph to have effect in relation to that production as if “2025” were substituted for “2024”.

• (6) In this paragraph—

• “theatrical production”, “production company” and “core expenditure” have the same meanings as in Part 15C of CTA 2009;

• “UK expenditure” has the same meaning as in that Part after the amendments made by paragraph 5;

• “European expenditure” has the same meaning as in that Part before the amendments made by paragraph 5.

• (7) For the purposes of sub-paragraph (5), a theatrical production “enters production” when core expenditure is first incurred on it.

Schedule 4

Part 1 — Amendments of Part 15D of CTA 2009

Introduction

1

Part 15D of CTA 2009 (orchestra tax relief) is amended as follows.

Time of election for orchestral concerts to be treated as a series

2

• (1) In section 1217QA (election for orchestral concerts to be treated as a series), in subsection (1), after “Customs” insert

— (a) before the date on which the company first delivers a company tax return for a period in relation to which a concert in the series falls to be treated in accordance with section 1217Q, or (b) if later,

.

• (2) That amendment has effect in relation to a series of concerts the first concert in which takes place on or after 1 April 2024.

Meaning of “core expenditure”

3

• (1) In section 1217RC(3) (expenditure that is not “core expenditure” on orchestral concert), in paragraph (a), for “or storage” substitute “, storage, or the provision of incidental goods or services to members of the audience”.

• (2) That amendment has effect in relation to expenditure incurred on or after 1 April 2024.

Provision to emphasise that capital expenditure does not generally qualify for relief

4

In section 1217QD (costs of orchestral concert), in subsection (3), at the end insert—

(As to other capital expenditure, see section 53 and subsection (2).)

UK expenditure threshold to replace EEA expenditure threshold

5

• (1) In section 1217RB (European expenditure condition)—

• (a) in the heading, for “European” substitute “UK”;

• (b) in subsection (1)—

• (i) for “European” (in both places it occurs) substitute “UK”;

• (ii) for “25%” substitute “10%”;

• (c) for subsection (2) substitute—

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

;

• (d) in subsection (3), for “European and non-European expenditure” substitute “expenditure that is and is not UK expenditure”;

• (e) in subsection (5), for “European” substitute “UK”.

• (2) In each of the following provisions, for “European” (in each place it occurs) substitute “UK”—

• (a) section 1217RA(2)(d) and (4)(d) (need to meet European expenditure condition to qualify for relief);

• (b) section 1217T(2) (provisional satisfaction of European expenditure condition);

• (c) section 1217TA(1), (2) and (3) (European expenditure condition provisionally satisfied not later satisfied).

• (3) In section 1217U (defined terms)—

• (a) omit the definitions of “European expenditure” and “European expenditure condition”;

• (b) at the end insert—

• “UK expenditure” has the meaning given by section 1217RB(2);
• “UK expenditure condition” has the meaning given by section 1217RB(1).

• (4) In Schedule 4 (index of defined expressions)—

• (a) omit the entries for “European expenditure (in Part 15D)” and “European expenditure condition (in Part 15D)”;

• (b) at the appropriate places insert—

UK expenditure (in Part 15D)	section 1217RB(2)

;

UK expenditure condition (in Part 15D)	section 1217RB(1)

.

• (5) For transitional provision in relation to this paragraph, see paragraph 11.

EEA expenditure not to qualify for relief

6

• (1) In section 1217RE(2) and (3) (amount of relief for orchestral concert), for “European” substitute “UK”.

• (2) For transitional provision in relation to this paragraph, see paragraph 12.

Profit element of non-arm's-length payments to connected parties not to qualify for relief

7

• (1) Section 1217RF (expenditure that qualifies for orchestra tax relief) is amended as follows.

• (2) In subsection (1)—

• (a) omit the “and” after paragraph (a);

• (b) after paragraph (b) insert

, and (c) is not excluded by subsection (3).

• (3) After subsection (2) insert—

(3) Expenditure is excluded to the extent that it represents connected party profit, unless subsection (5) applies. (4) For the purposes of subsection (3), expenditure represents connected party profit— (a) if it is a payment to a person (“C”) in exchange for something supplied, transferred or done by that person, (b) if the company is connected with C, and (c) if, and to the extent that, the amount of the payment exceeds the expenditure incurred by C in supplying, transferring or doing that thing. (5) This subsection applies if the amount of the payment is no more than would have been the case had the transaction been entered into at arm’s length. (6) A transaction would have been entered into “at arm’s length” if it made “the arm’s length provision” within the meaning of Part 4 of TIOPA 2010 (and for this purpose any limitation on the application of that Part is to be disregarded). (7) Subsections (8) and (9) apply if— (a) the supply by C to the company is one of a sequence of transactions in which the thing supplied has been supplied by one person to another, and (b) either— (i) each transacting party in the sequence is connected to at least one other transacting party in the sequence, or (ii) each transaction in the sequence is entered into in furtherance of a single scheme or arrangement (of whatever kind, and whether or not legally enforceable). (8) The reference to C in subsection (4)(c) is to be read as a reference to the supplier in the first transaction in the sequence. (9) The reference to the transaction in subsection (5) is to be read as including each transaction in the sequence. (10) In this section, “payment” includes any transfer of value.

• (4) Those amendments have effect in relation to expenditure incurred on or after 1 April 2024.

Amendment of exclusion for other reliefs

8

• (1) In section 1217RF(2) (exclusion of expenditure eligible for other creative sector relief)—

• (a) in the words before paragraph (a), for the words from “(assuming” to the end substitute “the company would be able to claim”;

• (b) before paragraph (a) insert—

(za) an R&D expenditure credit under Chapter 6A of Part 3, (zb) relief under Part 13 (relief for expenditure on research and development),

.

• (2) Those amendments have effect in relation to expenditure incurred on or after 1 April 2024.

Restriction where tax liabilities outstanding: meaning of “payment period”

9

In section 1217RI (payment in respect of orchestra tax credit), after subsection (4) insert—

(4A) For the purposes of subsection (4), 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.

Relief not to be available for companies in insolvency

10

• (1) After section 1217RK insert—

(1217RKA) (1) A company may not make a claim under section 1217RD or section 1217RG at a time when it 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.

• (2) That amendment has effect in relation to claims made on or after 1 April 2024.

Part 2 — Changes from European to UK expenditure: transitional provision

Transitional provision in relation to paragraph 5

11

• (1) This paragraph makes transitional provision in relation to paragraph 5.

• (2) The amendments made by that paragraph do not apply in relation to an orchestral concert or concert series if—

• (a) it has entered production before 1 April 2024, and

• (b) the separate orchestral trade in respect of it ceases before 1 April 2025.

• (3) Sub-paragraph (4) applies if—

• (a) an orchestral concert or concert series has entered production before 1 April 2024,

• (b) the separate orchestral trade in respect of the concert or series continues on or after 1 April 2025,

• (c) the production company’s company tax return for the first accounting period that ends on or after 1 April 2025 is accompanied by a statement of the amount of the core expenditure on the concert or series incurred before 1 April 2025 that is European expenditure, and

• (d) that statement shows that, in respect of core expenditure incurred before 1 April 2025, the European expenditure condition is met.

• (4) The company’s entitlement to—

• (a) an additional deduction under section 1217RD of CTA 2009, or

• (b) a tax credit under section 1217RG of that Act,

is unaffected by a failure to meet the UK expenditure condition so far as the entitlement derives from expenditure incurred before 1 April 2025.

• (5) For the purposes of sub-paragraph (4), an entitlement to a tax credit under section 1217RG of CTA 2009 derives from expenditure incurred before 1 April 2025 to the extent that it would arise if only costs incurred and income received before that date were taken into account in calculating the surrenderable loss of the company for the purposes of section 1217RH of that Act.

• (6) Sub-paragraph (7) applies in relation to an orchestral concert or concert series in respect of which the separate orchestral trade continues on or after 1 April 2025.

• (7) The reference in section 1217TA(1) of CTA 2009, as amended by paragraph 5(2)(c), to a statement having been made under section 1217T(2) of that Act includes reference to a statement having been made under that provision in relation to the European expenditure condition.

• (8) But the application of section 1217TA(1) of CTA 2009 as so amended is subject to sub-paragraph (4) (where that sub-paragraph applies).

• (9) In this paragraph—

• “orchestral concert”, “concert series”, “separate orchestral trade”, “production company” and “core expenditure” have the same meanings as in Part 15D of CTA 2009;

• “UK expenditure condition” has the same meaning as in that Part after the amendments made by paragraph 5;

• “European expenditure” and “European expenditure condition” have the same meanings as in that Part before the amendments made by paragraph 5.

• (10) For the purposes of this paragraph, an orchestral concert or concert series “enters production” when core expenditure is first incurred on it.

Transitional provision in relation to paragraph 6

12

• (1) This paragraph makes transitional provision in relation to paragraph 6.

• (2) The amendments made by that paragraph have effect in relation to accounting periods ending on or after 1 April 2024.

• (3) Sub-paragraph (4) applies in a case where expenditure incurred before 1 April 2024 is to be taken into account as qualifying expenditure for the purposes of section 1217RE of CTA 2009 (amount of relief for orchestral concert).

• (4) The references in subsections (2) and (3) of that section (as amended by paragraph 6) to so much of the qualifying expenditure incurred to date as is UK expenditure are to be read as references to so much of the qualifying expenditure incurred to date as—

• (a) has been incurred before 1 April 2024 and is European expenditure, or

• (b) has been incurred on or after that date and is UK expenditure.

• (5) But if the orchestral concert or concert series in relation to which sub-paragraph (4) applies has entered production before 1 April 2024, the production company may elect for that sub-paragraph to have effect in relation to that concert or series as if “2025” were substituted for “2024”.

• (6) In this paragraph—

• “orchestral concert”, “concert series”, “production company” and “core expenditure” have the same meanings as in Part 15D of CTA 2009;

• “UK expenditure” has the same meaning as in that Part after the amendments made by paragraph 5;

• “European expenditure” has the same meaning as in that Part before the amendments made by paragraph 5.

• (7) For the purposes of sub-paragraph (5), an orchestral concert or concert series “enters production” when core expenditure is first incurred on it.

Schedule 5

Part 1 — Amendments of Part 15E of CTA 2009

Introduction

1

Part 15E of CTA 2009 (museum and gallery exhibition tax relief) is amended as follows.

Museum and gallery exhibitions not to be wholly remote

2

• (1) In section 1218ZAA (meaning of “exhibition”), after subsection (4) insert—

(4A) “Admitted” means admitted in person to the venue where the objects or works are displayed.

• (2) That amendment has effect in relation to an exhibition only where the production phase begins on or after 1 April 2024.

Meaning of “core expenditure”

3

• (1) In section 1218ZCD(7) (expenditure that is not “core expenditure” on museum or gallery exhibition), in paragraph (a), for “and promotional events” substitute “, promotional events, and the provision of incidental goods or services to visitors”.

• (2) That amendment has effect in relation to expenditure incurred on or after 1 April 2024.

UK expenditure threshold to replace European expenditure threshold

4

• (1) In section 1218ZCC (European expenditure condition)—

• (a) in the heading, for “European” substitute “UK”;

• (b) in subsection (1)—

• (i) for “European” (in both places it occurs) substitute “UK”;

• (ii) for “25%” substitute “10%”;

• (c) for subsection (2) substitute—

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

;

• (d) in subsection (3), for “European and non-European expenditure” substitute “expenditure that is and is not UK expenditure”;

• (e) in subsection (5), for “European” substitute “UK”.

• (2) In each of the following provisions, for “European” (in each place it occurs) substitute “UK”—

• (a) section 1218ZCA(5) (need to meet European expenditure condition to qualify for relief);

• (b) section 1218ZE(2) (provisional satisfaction of European expenditure condition);

• (c) section 1218ZEA(1), (2) and (3) (European expenditure condition provisionally satisfied not later satisfied).

• (3) In section 1218ZFA (defined terms)—

• (a) omit the definitions of “European expenditure” and “European expenditure condition”;

• (b) at the end insert—

• “UK expenditure” has the meaning given by section 1218ZCC(2);
• “UK expenditure condition” has the meaning given by section 1218ZCC(1).

• (4) In Schedule 4 (index of defined expressions)—

• (a) omit the entries for “European expenditure (in Part 15E)” and “European expenditure condition (in Part 15E)”;

• (b) at the appropriate places insert—

UK expenditure (in Part 15E)	section 1218ZCC(2)

;

UK expenditure condition (in Part 15E)	section 1218ZCC(1)

.

• (5) For transitional provision in relation to this paragraph, see paragraph 10.

EEA expenditure not to qualify for relief

5

• (1) In section 1218ZCF(2) and (3) (amount of relief for museum or gallery exhibition), for “European” substitute “UK”.

• (2) For transitional provision in relation to this paragraph, see paragraph 11.

Profit element of non-arm's-length payments to connected parties not to qualify for relief

6

• (1) Section 1218ZCG (expenditure that qualifies for museums and galleries exhibition tax relief) is amended as follows.

• (2) In subsection (1), after paragraph (b) (but before the following “and”) insert—

(ba) is not excluded by subsection (2A),

.

• (3) After subsection (2) insert—

(2A) Expenditure is excluded to the extent that it represents connected party profit, unless subsection (2C) applies. (2B) For the purposes of subsection (2A), expenditure represents connected party profit— (a) if it is a payment to a person (“C”) in exchange for something supplied, transferred or done by that person, (b) if the company is connected with C, and (c) if, and to the extent that, the amount of the payment exceeds the expenditure incurred by C in supplying, transferring or doing that thing. (2C) This subsection applies if the amount of the payment is no more than would have been the case had the transaction been entered into at arm’s length. (2D) A transaction would have been entered into “at arm’s length” if it made “the arm’s length provision” within the meaning of Part 4 of TIOPA 2010 (and for this purpose any limitation on the application of that Part is to be disregarded). (2E) Subsections (2F) and (2G) apply if— (a) the supply by C to the company is one of a sequence of transactions in which the thing supplied has been supplied by one person to another, and (b) either— (i) each transacting party in the sequence is connected to at least one other transacting party in the sequence, or (ii) each transaction in the sequence is entered into in furtherance of a single scheme or arrangement (of whatever kind, and whether or not legally enforceable). (2F) The reference to C in subsection (2B)(c) is to be read as a reference to the supplier in the first transaction in the sequence. (2G) The reference to the transaction in subsection (2C) is to be read as including each transaction in the sequence. (2H) In this section, “payment” includes any transfer of value.

• (4) Those amendments have effect in relation to expenditure incurred on or after 1 April 2024.

Amendment of exclusion for R&D relief and other creative sector reliefs

7

• (1) In section 1218ZCG(2) (exclusion of expenditure eligible for R&D relief or other creative sector relief), in the words before paragraph (a), for the words from “(assuming” to the end substitute “the company would be able to claim”.

• (2) That amendment has effect in relation to expenditure incurred on or after 1 April 2024.

Restriction where tax liabilities outstanding: meaning of “payment period”

8

In section 1218ZCJ (payment in respect of museums and galleries exhibition tax credit), after subsection (4) insert—

(4A) For the purposes of subsection (4), 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.

Relief not to be available for companies in insolvency

9

• (1) After section 1218ZCL insert—

(1218ZCLA) (1) A company may not make a claim under section 1218ZCE or section 1218ZCH at a time when it 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.

• (2) That amendment has effect in relation to claims made on or after 1 April 2024.

Part 2 — Changes from European to UK expenditure: transitional provision

Transitional provision in relation to paragraph 4

10

• (1) This paragraph makes transitional provision in relation to paragraph 4.

• (2) The amendments made by that paragraph do not have effect in relation to an exhibition if—

• (a) it has entered production before 1 April 2024, and

• (b) the separate exhibition trade in respect of it ceases before 1 April 2025.

• (3) Sub-paragraph (4) applies if—

• (a) an exhibition has entered production before 1 April 2024,

• (b) the separate exhibition trade in respect of the exhibition continues on or after 1 April 2025,

• (c) the production company’s company tax return for the first accounting period that ends on or after 1 April 2025 is accompanied by a statement of the amount of the core expenditure on the exhibition incurred before 1 April 2025 that is European expenditure, and

• (d) that statement shows that, in respect of core expenditure incurred before 1 April 2025, the European expenditure condition is met.

• (4) The company’s entitlement to—

• (a) an additional deduction under section 1218ZCE of CTA 2009, or

• (b) a tax credit under section 1218ZCH of that Act,

is unaffected by a failure to meet the UK expenditure condition so far as the entitlement derives from expenditure incurred before 1 April 2025.

• (5) For the purposes of sub-paragraph (4), an entitlement to a tax credit under section 1218ZCH of CTA 2009 derives from expenditure incurred before 1 April 2025 to the extent that it would arise if only costs incurred and income received before that date were taken into account in calculating the surrenderable loss of the company for the purposes of section 1218ZCI of that Act.

• (6) Sub-paragraph (7) applies in relation to an exhibition in respect of which the separate exhibition trade continues on or after 1 April 2025.