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Part 15A Corporation Tax Act 2009

Corporation Tax Act 2009 Part 15A

Finance Act 2013 (Now incorporated into CTA 2009 Part 15A) introduced a new relief for the animation industry. Animation Tax Relief is a type of Television Tax Relief (TTR).

»Ê¹ÚÌåÓýapp legislation on television production provides specific rules for relief on animations in addition to high-end television productions.

Tax treatment

For tax purposes only, the legislation:

• deems that the production of each animation is a separate trade with a start and end date separate to that of the company,
• describes what income and expenditure is eligible for additional tax relief and circumstances where there are exceptions to the normal rules for income and expenditure, and
• restricts the use of losses associated with that trade in certain circumstances.

»Ê¹ÚÌåÓýapp new rules apply to all relevant programmes that are developed by a Television Production Company (TPC) (APC10110). Animations are relevant programmes provided that they are not an excluded programme. »Ê¹ÚÌåÓýappre are some specific rules related to animations.

If there is no animation TPC then the rules do not apply. This might be because:

• no company meets the required criteria, or
• the company has elected not to be treated as a TPC.

Where any relevant programme is developed by a TPC, it must apply the rules for the separate programme trade whether the programme is eligible for TRR or not. A company may therefore elect to not be treated as a TPC in order to remove the requirement to apply the rules for a separate programme trade.

Television Tax Relief (TTR)

TTR applies to TPCs engaged in the making of:

• a British programme (APC40030),
• that is intended for broadcast (APC40020), and
• at least 25% of core expenditure (APC50010) is incurred on goods or services used or consumed in the United Kingdom (APC50050).From 1 April 2015 this reduces to 10% for programmes which had not completed principal photography by that date.

Those TPCs that are entitled to TTR can claim:

• an additional deduction in computing their taxable profits (APC55010), and
• where that additional deduction creates or increases a loss, to surrender losses for a payable tax credit (APC55100).

Both the additional deduction and the payable credit are calculated on the basis of UK core expenditure up to a maximum of 80% of the total core expenditure by the TPC. Core expenditure is expenditure on pre-production, principal photography and post-production.

Commencement: TTR

TTR is available for expenditure that is used or consumed on or after 1 April 2013.