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»Ê¹ÚÌåÓýapp following example illustrates how a »Ê¹ÚÌåÓýappatrical Production Company (TPC) that sustains a surrenderable loss can surrender that loss in return for a »Ê¹ÚÌåÓýappatre Tax Credit (TTC) (TTR55100).  In this case the production spans two periods.

As with the additional deduction (TTR55050), the calculation of the TTC is cumulative where the production takes more than one period to complete.

Example

A TPC makes a qualifying production with total core expenditure of £1³¾, all of which is UK expenditure.  »Ê¹ÚÌåÓýapp production was commissioned by a producer which pays £900k for it.  »Ê¹ÚÌåÓýapp production qualifies as a touring production.

»Ê¹ÚÌåÓýapp production takes two periods of account to make, and the TPC incurs expenditure of £400°ì in the first period and £600°ì in the second.  »Ê¹ÚÌåÓýapp commissioning producer pays the TPC £500k in the first period and the remaining £400°ì in the second.

In order to establish the profit or loss made in each accounting period, the TPC should apply the income recognition rules, rather than the amount which the commissioning producer actually pays during each period (TTR20220).

In this example, the income is calculated on the basis of the proportion of total expenditure incurred in each period multiplied by the estimated total income.

»Ê¹ÚÌåÓýapp TPC elects to surrender the full amount of losses possible for TTC.

First period

-	Amount
Estimated income	£360°ì (£400°ì/£1³¾ x £900k)Â
Expenditure	(£400°ì)
Trading loss before »Ê¹ÚÌåÓýappatre Tax Relief (TTR)	(£40°ì)
»Ê¹ÚÌåÓýappatre Tax Relief - additional deduction (80% x £400°ì total core expenditure to date)	(£320°ì)
Trading loss after TTR	(£360°ì)

»Ê¹ÚÌåÓýapp surrenderable loss for the first accounting period is the lesser of:

• the £360°ì available loss, and
• the £320°ì additional deduction.

»Ê¹ÚÌåÓýapprefore, only £320°ì of the loss can be surrendered. Assuming the rates from 1 April 2025 apply (TTR10800), this gives a TTC of £144k (45% TTC rate for touring productions x £320°ì loss surrendered).

»Ê¹ÚÌåÓýapp remaining loss of £40k (£360°ì - £320°ì) is carried forward.

Second period

-	Amount
Income	£540°ì (£900k - £360°ì)
Expenditure	(£600°ì) (£1³¾ - £400°ì)
Trading loss before »Ê¹ÚÌåÓýappatre Tax Relief (TTR)	(£60°ì)
»Ê¹ÚÌåÓýappatre Tax Relief - additional deduction ((80% x £1³¾ total core expenditure) - £320°ì additional deduction claimed in the previous Period)	(480k)
Trading loss after TTR	(£540°ì)

»Ê¹ÚÌåÓýapp surrenderable loss for the second accounting period is the lesser of:

• the £580k available loss (£540°ì trading loss after TTR plus the £40k loss brought forward), and
• the £480°ì additional deduction.

»Ê¹ÚÌåÓýapprefore, only £480°ì of the loss can be surrendered, giving a TTC of £216k (45% TTC rate for touring productions x £480°ì loss surrendered).

»Ê¹ÚÌåÓýapp remaining £100k loss (£580k - £480°ì) can be carried forward, or treated as a terminal loss if the trade ceases (TTR30040).

Cumulative effect

This means that the TTC is worth £360°ì over the two periods (£144k + £216k), the same as it would have been had the production been made in a single period.

This is provided that claims for TTC are made in both periods.

Summary

-	Period 1	Period 2
Expenditure incurred to end of period (all UK)	£400°ì	£1³¾
Additional deduction to end of period (in this example 80% of total core expenditure)	£320°ì	£800°ì
Less additional deduction claimed for earlier period(s)	£²Ô¾±±ô	(£320°ì)
Additional deduction due for the period	£320°ì	£480°ì
Estimated total income attributed to period	£360°ì	£540°ì
Expenditure attributed to period	£400°ì	£600°ì
Additional deduction due for the period	£320°ì	£480°ì
Trading profit/(loss) after TTR	(£360°ì)	(£540°ì)
Surrenderable loss (lower of available loss for the period and additional deduction)	(£320°ì)	(£480°ì)