Finance (No. 2) Bill

Session 2012 - 13
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Finance (No. 2) Bill

Finance (No. 2) Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009
267

“Intended for broadcast”
1216CA
Intended for broadcast
(1)
The relevant programme must be intended for broadcast to the
general public.
(2)
Whether this condition is met is determined when television
5
production activities begin, so that—
(a)
where a relevant programme is originally intended for
broadcast, this condition continues to be met even if that
ceases to be the intention, and
(b)
where a relevant programme is not originally intended for
10
broadcast, this condition is not met even if that becomes the
intention.
British programmes
1216CB
British programme
(1)
The relevant programme must be certified by the Secretary of State
15
as a British programme.
(2)
The Secretary of State, with the approval of the Treasury, may by
regulations specify conditions which must be met by a relevant
programme before it may be certified as a British programme.

These conditions are known as the “cultural test”.
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(3)
Regulations under subsection (2) may—
(a)
specify different conditions in relation to different
descriptions of relevant programme,
(b)
provide that specified descriptions of programme may not be
certified as a British programme, and
25
(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 specified conditions.

“Specified” means specified in the regulations.
(4)
Regulations under subsection (2) are to be made by statutory
30
instrument.
(5)
A statutory instrument containing regulations under subsection (2)
is subject to annulment in pursuance of a resolution of the House of
Commons.
(6)
Sections 1216CC and 1216CD contain further provision about
35
certification of programmes as British programmes, including
provision about applications for, and withdrawal of, certification.
1216CC
Applications for certification
(1)
An application for certification of a relevant programme as a British
programme is to be made to the Secretary of State by the television
40
production company.
(2)
The application may be for an interim or final certificate.
(3)
An interim certificate is a certificate that—

Finance (No. 2) Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009
268

(a)
is granted before the programme is completed, 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—
5
(a)
is granted after the programme is completed, and
(b)
states that the programme is a British programme.
(5)
The applicant must provide the Secretary of State with any
documents or information which the Secretary of State requires in
order to determine the application.
10
(6)
The Secretary of State may require information provided for the
purposes of the 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
15
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 the
cultural test, and
20
(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.
(8)
Regulations under subsection (7) are to be made by statutory
25
instrument.
(9)
A statutory instrument containing regulations under subsection (7)
is subject to annulment in pursuance of a resolution of the House of
Commons.
1216CD
Certification and withdrawal of certification
30
(1)
If the Secretary of State is satisfied that the requirements are met for
interim or final certification of a relevant programme as a British
programme, the Secretary of State must certify the programme
accordingly.
(2)
If the Secretary of State is not satisfied that those requirements are
35
met, the Secretary of State must refuse the application.
(3)
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
40
(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.
(4)
An interim certificate ceases to have effect when a final certificate is
issued.
45

Finance (No. 2) Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009
269

(5)
If it appears to the Secretary of State that a relevant programme
certified under this Part ought not to have been certified, the
Secretary of State may revoke its certification.
(6)
Unless the Secretary of State directs otherwise, a certificate that is
revoked is treated as never having had effect.
5
UK expenditure
1216CE
UK expenditure
(1)
At least 25% of the core expenditure on the relevant programme
incurred—
(a)
in the case of a British programme that is not a qualifying co-
10
production, by the company, and
(b)
in the case of a qualifying co-production, by the co-
producers,

must be UK expenditure.
(2)
The Treasury may by regulations amend the percentage specified in
15
subsection (1).
Additional deductions
1216CF
Additional deduction for qualifying expenditure
(1)
If television tax relief is available to the company, it may (on making
a claim) make an additional deduction in respect of qualifying
20
expenditure on the relevant programme.
(2)
The deduction is made in calculating the profit or loss of the separate
programme trade.
(3)
In this Chapter “qualifying expenditure” means core expenditure on
the relevant programme that falls to be taken into account under
25
Chapter 2 in calculating the profit or loss of the separate programme
trade for tax purposes.
(4)
The Treasury may by regulations—
(a)
amend subsection (3), and
(b)
provide that expenditure of a specified description is or is not
30
to be regarded as qualifying expenditure.
1216CG
Amount of additional deduction
(1)
For the first period of account during which the separate programme
trade is carried on, the amount of the additional deduction is—

where E is—
35
(a)
so much of the qualifying expenditure as is UK expenditure,
or
(b)
if less, 80% of the total amount of qualifying expenditure.
(2)
For any period of account after the first, the amount of the additional
deduction is given by—
40

Finance (No. 2) Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009
270


where—
E is—
(a)
so much of the qualifying expenditure incurred to
date as is UK expenditure, or
(b)
if less, 80% of the total amount of qualifying
5
expenditure incurred to date, and
P is the total amount of the additional deductions given for
previous periods.
(3)
The Treasury may by regulations amend this section.
Television tax credits
10
1216CH
Television tax credit claimable if company has surrenderable loss
(1)
If television tax relief is available to the company, it may claim a
television tax credit for an accounting period in which it has a
surrenderable loss.
(2)
The company’s surrenderable loss in an accounting period is—
15
(a)
the company’s available loss for the period in the separate
programme trade (see subsection (3)), or
(b)
if less, the available qualifying expenditure for the period (see
subsections (5) and (6)).
(3)
The company’s available loss for an accounting period is given by—
20

where—
L is the amount of the company’s loss for the period in the
separate programme trade, and
RUL is the amount of any relevant unused loss of the company
(see subsection (4)).
25
(4)
The “relevant unused loss” of a company is so much of any available
loss of the company for the previous accounting period as has not
been—
(a)
surrendered under section 1216CI(1), or
(b)
carried forward under section 45 of CTA 2010 and set against
30
profits of the separate programme trade.
(5)
For the first period of account during which the separate programme
trade is carried on, the available qualifying expenditure is the
amount that is E for that period for the purposes of section
1216CG(1).
35
(6)
For any period of account after the first, the available qualifying
expenditure is given by—

where—
E is the amount that is E for that period for the purposes of
section 1216CG(2), and
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S is the total amount previously surrendered under section
1216CI(1).

Finance (No. 2) Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009
271

(7)
If a period of account of the separate programme trade does not
coincide with an accounting period, any necessary apportionments
are to be made by reference to the number of days in the periods
concerned.
1216CI
Surrendering of loss and amount of television tax credit
5
(1)
The company may surrender the whole or part of its surrenderable
loss in an accounting period.
(2)
If the company surrenders the whole or part of that loss, the amount
of the television tax credit to which it is entitled for the accounting
period is 25% of the amount of the loss surrendered.
10
(3)
The company’s available loss for the accounting period is reduced by
the amount surrendered.
1216CJ
Payment in respect of television tax credit
(1)
If the company—
(a)
is entitled to a television tax credit for a period, and
15
(b)
makes a claim,

the Commissioners for Her Majesty’s Revenue and Customs (“the
Commissioners”) must pay to the company the amount of the credit.
(2)
An amount payable in respect of—
(a)
a television tax credit, or
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(b)
interest on a television tax credit under section 826 of ICTA,

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

To the extent that it is so applied the Commissioners’ liability under
subsection (1) is discharged.
25
(3)
If the company’s company tax return for the accounting period is
enquired into by the Commissioners, no payment in respect of a
television tax credit for that period need be made before the
Commissioners’ enquiries are completed (see paragraph 32 of
Schedule 18 to FA 1998).
30

In those circumstances the Commissioners may make a payment on
a provisional basis of such amount as they consider appropriate.
(4)
No payment need be made in respect of a television tax credit for an
accounting period before the company has paid to the
Commissioners any amount that it is required to pay for payment
35
periods ending in that accounting period—
(a)
under PAYE regulations,
(b)
under section 966 of ITA 2007 (visiting performers), or
(c)
in respect of Class 1 national insurance contributions under
Part 1 of the Social Security Contributions and Benefits Act
40
1992 or Part 1 of the Social Security Contributions and
Benefits (Northern Ireland) Act 1992.
(5)
A payment in respect of a television tax credit is not income of the
company for any tax purpose.