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Finance (No. 2) Bill


Finance (No. 2) Bill
Schedule 16 — Tax relief for video games development
Part 1 — Amendments of CTA 2009

295

 

(b)   

if that requirement is met, the final certificate has effect for

the completion period and for any interim accounting period,

and

(c)   

if that requirement is not met, the company—

(i)   

is not entitled to special video games relief for any

5

period, and

(ii)   

must amend accordingly its company tax return for

any period for which such relief was claimed.

(4)   

If the company abandons video game development activities in

relation to the video game—

10

(a)   

its company tax return for the completion period may be

accompanied by an interim certificate, and

(b)   

the abandonment of video game development activities does

not affect any entitlement to special video games relief in that

or any previous accounting period.

15

(5)   

If a final certificate is revoked, the company—

(a)   

is not entitled to special video games relief for any period,

and

(b)   

must amend accordingly its company tax return for any

period for which such relief was claimed.

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1217EB  

The UK expenditure condition

(1)   

The company is not entitled to special video games relief for an

interim accounting period unless—

(a)   

its company tax return for the period states the amount of

planned core expenditure on the video game that is UK

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expenditure, and

(b)   

that amount is such as to indicate that the condition in section

1217CE (the UK expenditure condition) will be met on

completion of the video game.

   

If those requirements are met, the company is provisionally treated

30

in relation to that period as if that condition was met.

(2)   

If such a statement is made but it subsequently appears that the

condition will not be met on completion of the video game, the

company—

(a)   

is not entitled to special video games relief for any period for

35

which its entitlement depended on such a statement, and

(b)   

must amend accordingly its company tax return for any such

period.

(3)   

When the video game is completed or the company abandons video

game development activities in relation to it (as the case may be), the

40

company’s company tax return for the completion period must be

accompanied by a final statement of the amount of core expenditure

on the video game that is UK expenditure.

(4)   

If that statement shows that the condition in section 1217CE is not

met, the company—

45

(a)   

is not entitled to special video games relief for any period,

and

 
 

Finance (No. 2) Bill
Schedule 17 — Television and video games tax relief: consequential amendments

296

 

(b)   

must amend accordingly its company tax return for any

period for which such relief was claimed.

1217EC  

Time limit for amendments and assessments

   

Any amendment or assessment necessary to give effect to the

provisions of this Chapter may be made despite any limitation on the

5

time within which an amendment or assessment may normally be

made.”

Part 2

Commencement

2     (1)  

Any power conferred on the Secretary of State or the Treasury by virtue of

10

this Schedule to make regulations or an order comes into force on the day on

which this Act is passed.

      (2)  

So far as not already brought into force by sub-paragraph (1), the

amendments made by this Schedule come into force in accordance with

provision contained in an order made by the Treasury.

15

      (3)  

An order under sub-paragraph (2)—

(a)   

may make different provision for different purposes;

(b)   

may make such adaptations of Part 15B of CTA 2009 as appear to be

necessary or expedient in consequence of other provisions of this Act

not yet having come into force.

20

3     (1)  

The amendments made by this Schedule have effect in relation to accounting

periods beginning on or after 1 April 2013.

      (2)  

Sub-paragraph (3) applies where a company has an accounting period

beginning before 1 April 2013 and ending on or after that date (“the

straddling period”).

25

      (3)  

For the purposes of Part 15B of CTA 2009—

(a)   

so much of the straddling period as falls before 1 April 2013, and so

much of that period as falls on or after that date, are treated as

separate accounting periods, and

(b)   

any amounts brought into account for the purposes of calculating for

30

corporation tax purposes the profits of any trade of the company for

the straddling period are apportioned to the two separate accounting

periods on such basis as is just and reasonable.

Schedule 17

Section 35

 

Television and video games tax relief: consequential amendments

35

ICTA

1     (1)  

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

      (2)  

In subsection (1), after paragraph (f) insert—

“(fa)   

a payment of television tax credit falls to be made to a

company; or

40

 
 

Finance (No. 2) Bill
Schedule 17 — Television and video games tax relief: consequential amendments

297

 

(fb)   

a payment of video game tax credit falls to be made to a

company; or”.

      (3)  

In subsection (3C), after “film tax credit” insert “, television tax credit or

video game tax credit”.

      (4)  

In subsection (8A)(b)(ii), after “film tax credit” insert “or television tax credit

5

or video game tax credit”.

      (5)  

In subsection (8BA), after “film tax credit” (in both places) insert “or

television tax credit or video game tax credit”.

FA 1998

2          

Schedule 18 to FA 1998 (company tax returns, assessments and related

10

matters) is amended as follows.

3     (1)  

Paragraph 10 (other claims and elections to be included in return) is

amended as follows.

      (2)  

In sub-paragraph (4), for “film tax relief” substitute “tax relief under Part 15,

15A or 15B of the Corporation Tax Act 2009”.

15

      (3)  

After sub-paragraph (5) insert—

    “(6)  

An election under section 1216AE(7) of the Corporation Tax Act

2009 (election not to be a television production company) can only

be made by being included in a company tax return (see section

1216AE(8)(a) of that Act).

20

      (7)  

An election under section 1217AB(6) of the Corporation Tax Act

2009 (election not to be a video games development company) can

only be made by being included in a company tax return (see

section 1217AB(7)(a) of that Act).”

4     (1)  

Paragraph 52 (recovery of excessive overpayments etc) is amended as

25

follows.

      (2)  

In sub-paragraph (2), after paragraph (bd) insert—

“(be)   

television tax credit under Part 15A of that Act,

(bf)   

video game tax credit under Part 15B of that Act,”.

      (3)  

In sub-paragraph (5)—

30

(a)   

after paragraph (af) insert—

“(ag)   

an amount of television tax credit paid to a

company for an accounting period,

(ah)   

an amount of video game tax credit paid to a

company for an accounting period,”;

35

(b)   

after “(ae)” insert “, (ag), (ah)”.

5     (1)  

Part 9D (claims for film tax relief) is amended as follows.

      (2)  

In paragraph 83S (introduction), for “film tax relief” substitute “the

following reliefs—

(a)   

film tax relief,

40

(b)   

television tax relief,

(c)   

video games tax relief.”

 
 

Finance (No. 2) Bill
Schedule 17 — Television and video games tax relief: consequential amendments

298

 

      (3)  

The heading of that Part becomes “Claims for tax relief under Part 15,

15A or 15B of the Corporation Tax Act 2009”.

CAA 2001

6          

In Schedule A1 to CAA 2001 (first-year tax credits), in paragraph 11(4), omit

the “and” at the end of paragraph (b) and after paragraph (c) insert—

5

“(d)   

Chapter 3 of Part 15A of that Act (television tax credits),

and

(e)   

Chapter 3 of Part 15B of that Act (video game tax credits).”

FA 2007

7          

In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa)

10

(meaning of “corporation tax credit”), omit the “or” at the end of sub-

paragraph (iv) and after that sub-paragraph insert—

“(iva)   

a television tax credit under Chapter 3 of Part 15A

of that Act,

(ivb)   

a video game tax credit under Chapter 3 of Part 15B

15

of that Act, or”.

CTA 2009

8          

In Chapter 6A of Part 3 of CTA 2009 (trade profits: R&D expenditure

credits), after section 104B insert—

“104BA  

Restriction on claiming other tax reliefs

20

(1)   

For provision prohibiting an R&D expenditure credit being given

under this Chapter and relief being given under Chapter 3 of Part 15

(film tax relief), see section 1195(3A).

(2)   

For provision prohibiting an R&D expenditure credit being given

under this Chapter and relief being given under Chapter 3 of Part

25

15A (television tax relief), see section 1216C(4).

(3)   

For provision prohibiting an R&D expenditure credit being given

under this Chapter and relief being given under Chapter 3 of Part

15B (video games tax relief), see section 1217C(4).”

9          

In Part 8 of CTA 2009 (intangible fixed assets), in Chapter 10 (excluded

30

assets), after section 808 insert—

“808A   

Assets representing production expenditure on certain TV

programmes

(1)   

This Part does not apply to an intangible fixed asset held by a

television production company so far as it represents production

35

expenditure on a television programme to which Chapter 2 of Part

15A (taxation of activities of television production company) applies.

(2)   

In this section—

(a)   

“television programme” has the same meaning as in Part 15A

(see section 1216AA),

40

(b)   

“television production company” has the same meaning as in

that Part (see section 1216AE), and

 
 

Finance (No. 2) Bill
Schedule 17 — Television and video games tax relief: consequential amendments

299

 

(c)   

“production expenditure” has the same meaning as in that

Part (see section 1216AG(2)).

808B    

Assets representing core expenditure on video games

(1)   

This Part does not apply to an intangible fixed asset held by a video

games development company so far as it represents core expenditure

5

on a video game to which Chapter 2 of Part 15B (taxation of activities

of video games development company) applies.

(2)   

In this section—

(a)   

“video game” has the same meaning as in Part 15B (see

section 1217AA),

10

(b)   

“video games development company” has the same meaning

as in that Part (see section 1217AB), and

(c)   

“core expenditure” has the same meaning as in that Part (see

section 1217AD).”

10         

In Part 13 of CTA 2009 (additional relief for expenditure on research and

15

development), after section 1040 insert—

“1040ZA 

Restriction on claiming other tax reliefs

(1)   

For provision prohibiting relief being given under this Part and

under Chapter 3 of Part 15 (film tax relief), see section 1195(3A).

(2)   

For provision prohibiting relief being given under this Part and

20

under Chapter 3 of Part 15A (television tax relief), see section

1216C(4).

(3)   

For provision prohibiting relief being given under this Part and

under Chapter 3 of Part 15B (video games tax relief), see section

1217C(4).”

25

11         

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

12         

In section 1195 (availability and overview of film tax relief), after subsection

(3) insert—

“(3A)   

But film tax relief is not available in respect of any expenditure if—

(a)   

the company is entitled to an R&D expenditure credit under

30

Chapter 6A of Part 3 in respect of the expenditure, or

(b)   

the company has obtained relief under Part 13 (additional

relief for expenditure on research and development) in

respect of the expenditure.”

13    (1)  

Section 1206 (confidentiality of information) is amended as follows.

35

      (2)  

In subsection (1), for the words from “Schedule 1” to the end substitute “any

of the provisions listed in subsection (1A)”.

      (3)  

After subsection (1) insert—

“(1A)   

The provisions referred to in subsection (1) are—

(a)   

sections 1216CB to 1216CD (certification of relevant

40

programmes as British),

(b)   

sections 1217CB to 1217CD (certification of video games as

British), and

 
 

Finance (No. 2) Bill
Schedule 17 — Television and video games tax relief: consequential amendments

300

 

(c)   

Schedule 1 to the Films Act 1985 (certification of films as

British).”

      (4)  

In subsection (2), for “UK Film Council” substitute “British Film Institute”.

      (5)  

After that subsection insert—

“(2A)   

The Treasury may by order amend subsection (2)—

5

(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.”

      (6)  

In subsection (3)—

10

(a)   

in paragraph (a), for the words from “Schedule 1” to the end

substitute “any of the provisions listed in subsection (1A)”;

(b)   

in paragraph (d), for “that Schedule or this Part” substitute “any of

Parts 15 to 15B of this Act or Schedule 1 to the Films Act 1985”.

14    (1)  

In section 1310 of CTA 2009 (orders and regulations), subsection (4) is

15

amended as follows.

      (2)  

Omit the “or” at the end of paragraph (e) and after that paragraph insert—

“(ea)   

section 1216AF(3) (meaning of “television production

activities” etc),

(eb)   

section 1216AH(3) (meaning of “UK expenditure” etc),

20

(ec)   

section 1216CE(2) (UK expenditure),

(ed)   

section 1216CF(4) (additional deduction for qualifying

expenditure),

(ee)   

section 1216CG(3) (amount of additional deduction),

(ef)   

section 1217AC(2) (meaning of “video games development

25

activities” etc),

(eg)   

section 1217AE(3) (meaning of “UK expenditure” etc),

(eh)   

section 1217CE(2) (UK expenditure),

(ei)   

section 1217CF(4) (additional deduction for qualifying

expenditure),

30

(ej)   

section 1217CG(3) (amount of additional deduction),”.

15    (1)  

Schedule 4 to CTA 2009 (index of defined expressions) is amended as

follows.

      (2)  

At the appropriate place insert—

 

“the company (in

section 1216E(1)”;

 

35

 

Chapter 5 of Part 15A)

  
 

“company tax return (in

section 1216AJ”;

 
 

Part 15A)

  
 

“the completion period

section 1216E(1)”;

 
 

(in Chapter 5 of Part 15A)

  

40

 

“co-producer (in Part

section 1216AI”;

 
 

15A)

  
 
 

Finance (No. 2) Bill
Schedule 17 — Television and video games tax relief: consequential amendments

301

 
 

“core expenditure (in

section 1216AG(3)”;

 
 

Part 15A)

  
 

“costs of the relevant

section 1216BC”;

 
 

programme (in Chapter 2

  
 

of Part 15A)

  

5

 

“final certificate (in

section 1216CC”;

 
 

Chapter 5 of Part 15A)

  
 

“income from the

section 1216BB”;

 
 

relevant programme (in

  
 

Chapter 2 of Part 15A)

  

10

 

“interim accounting

section 1216E(1)”;

 
 

period (in Chapter 5 of

  
 

Part 15A)

  
 

“interim certificate (in

section 1216CC”;

 
 

Chapter 5 of Part 15A)

  

15

 

“principal photography

section 1216AF(2)”;

 
 

(in Part 15A)

  
 

“production expenditure

section 1216AG(2)”;

 
 

(in Part 15A)

  
 

“qualifying co-

section 1216AI”;

 

20

 

production (in Part 15A)

  
 

“qualifying expenditure

section 1216CF(3)”;

 
 

(in Chapter 3 of Part 15A)

  
 

“relevant programme (in

section 1216AB”;

 
 

Part 15A)

  

25

 

“the separate programme

section 1216B(3)”;

 
 

trade (in Chapters 2, 3

  
 

and 5 of Part 15A)

  
 

“special television relief

section 1216E(1)”;

 
 

(in Chapter 5 of Part 15A)

  

30

 

“television production

section 1216AF”;

 
 

activities (in Part 15A)

  
 

“television production

section 1216AE”;

 
 

company (in Part 15A)

  
 

“television programme

section 1216AA”;

 

35

 

(in Part 15A)

  
 

“television tax relief (in

section 1216C(2)”;

 
 

Part 15A)

  
 

“UK expenditure (in Part

section 1216AH”.

 
 

15A)

  

40

 
 

 
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