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Finance Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009

277

 

1216DB  

Use of losses in later periods

(1)   

This section applies to the following accounting periods of the

company (“relevant later periods”)—

(a)   

the completion period, and

(b)   

any subsequent accounting period during which the separate

5

programme trade continues.

(2)   

Subsection (3) applies if a loss made in the separate programme trade

is carried forward under section 45 of CTA 2010 from a pre-

completion period to a relevant later period.

(3)   

So much (if any) of the loss as is not attributable to television tax

10

relief (see subsection (6)) may be treated for the purposes of loss

relief as if it were a loss made in the period to which it is carried

forward.

(4)   

Subsection (5) applies if in a relevant later period a loss is made in the

separate programme trade.

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(5)   

The amount of the loss that may be—

(a)   

deducted from total profits of the same or an earlier period

under section 37 of CTA 2010, or

(b)   

surrendered as group relief under Part 5 of that Act,

   

is restricted to the amount (if any) that is not attributable to television

20

tax relief (see subsection (6)).

(6)   

The amount of a loss in any period that is attributable to television

tax relief is calculated by deducting from the total amount of the loss

the amount there would have been if there had been no additional

deduction under Chapter 3 in that or any earlier period.

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(7)   

This section does not apply to a loss to the extent that it is carried

forward or surrendered under section 1216DC.

1216DC  

Terminal losses

(1)   

This section applies if—

(a)   

a company (“company A”) is the television production

30

company in relation to a qualifying programme,

(b)   

company A ceases to carry on its separate trade in relation to

that programme (“trade X”) (see section 1216B), and

(c)   

if company A had not ceased to carry on trade X, it could

have carried forward an amount under section 45 of CTA

35

2010 to be set against profits of trade X in a later period (“the

terminal loss”).

(2)   

If on cessation of trade X company A—

(a)   

is the television production company in relation to another

qualifying programme, and

40

(b)   

is carrying on its separate trade in relation to that programme

(“trade Y”),

   

it may (on making a claim) make an election under subsection (3).

(3)   

The election is to have the terminal loss (or a part of it) treated as if it

were a loss brought forward under section 45 of CTA 2010 to be set

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Finance Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009

278

 

against the profits of trade Y in the first accounting period beginning

after the cessation and so on.

(4)   

Subsection (5) applies if on cessation of trade X—

(a)   

there is another company (“company B”) that is the television

production company in relation to a qualifying programme,

5

(b)   

company B is carrying on its separate trade in relation to that

programme (“trade Z”), and

(c)   

company B is in the same group as company A for the

purposes of Part 5 of CTA 2010 (group relief).

(5)   

Company A may surrender the terminal loss (or a part of it) to

10

company B.

(6)   

On the making of a claim by company B the amount surrendered is

treated as if it were a loss brought forward by company B under

section 45 of CTA 2010 to be set against the profits of trade Z of the

first accounting period of that company beginning after the cessation

15

and so on.

(7)   

The Treasury may, in relation to the surrender of a loss under

subsection (5) and the resulting claim under subsection (6), make

provision by regulations corresponding, subject to such adaptations

or other modifications as appear to them to be appropriate, to that

20

made by Part 8 of Schedule 18 to FA 1998 (company tax returns:

claims for group relief).

(8)   

“Qualifying programme” means a relevant programme in relation to

which the conditions for television tax relief are met (see 1216C(2)).

Chapter 5

25

Provisional entitlement to relief

1216E   

Introduction

(1)   

In this Chapter—

“the company” means the television production company in

relation to a relevant programme,

30

“the completion period” means the accounting period of the

company—

(a)   

in which the relevant programme is completed, or

(b)   

if the company does not complete the relevant

programme, in which it abandons television

35

production activities in relation to it,

“interim accounting period” means any earlier accounting

period of the company during which television production

activities are carried on in relation to the relevant

programme,

40

“interim certificate” and “final certificate” have the meaning

given by section 1216CC,

“the separate programme trade” means the company’s separate

trade in relation to the relevant programme (see section

1216B), and

45

“special television relief” means—

 
 

Finance Bill
Schedule 15 — Tax relief for television production
Part 1 — Amendments of CTA 2009

279

 

(a)   

television tax relief, or

(b)   

relief under section 1216DC (transfer of terminal

losses from one relevant programme to another).

(2)   

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

state that the relevant programme has been completed or that the

5

company has abandoned television production activities in relation

to it (as the case may be).

1216EA  

Certification as a British programme

(1)   

The company is not entitled to special television relief for an interim

accounting period unless its company tax return for the period is

10

accompanied by an interim certificate.

(2)   

If an interim certificate ceases to be in force (otherwise than on being

superseded by a final certificate) or is revoked, the company—

(a)   

is not entitled to special television relief for any period for

which its entitlement depended on the certificate, and

15

(b)   

must amend accordingly its company tax return for any such

period.

(3)   

If the relevant programme is completed by the company—

(a)   

its company tax return for the completion period must be

accompanied by a final certificate,

20

(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 television relief for any

25

period, and

(ii)   

must amend accordingly its company tax return for

any period for which such relief was claimed.

(4)   

If the company abandons television production activities in relation

to the relevant programme—

30

(a)   

its company tax return for the completion period may be

accompanied by an interim certificate, and

(b)   

the abandonment of television production activities does not

affect any entitlement to special television relief in that or any

previous accounting period.

35

(5)   

If a final certificate is revoked, the company—

(a)   

is not entitled to special television relief for any period, and

(b)   

must amend accordingly its company tax return for any

period for which such relief was claimed.

1216EB  

The UK expenditure condition

40

(1)   

The company is not entitled to special television relief for an interim

accounting period unless—

(a)   

its company tax return for the period states the amount of

planned core expenditure on the relevant programme that is

UK expenditure, and

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Finance Bill
Schedule 15 — Tax relief for television production
Part 2 — Commencement

280

 

(b)   

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

1216CE (the UK expenditure condition) will be met on

completion of the programme.

   

If those requirements are met, the company is provisionally treated

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

5

(2)   

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

condition will not be met on completion of the programme, the

company—

(a)   

is not entitled to special television relief for any period for

which its entitlement depended on such a statement, and

10

(b)   

must amend accordingly its company tax return for any such

period.

(3)   

When the relevant programme is completed or the company

abandons television production activities in relation to it (as the case

may be), the company’s company tax return for the completion

15

period must be accompanied by a final statement of the amount of

core expenditure on the programme that is UK expenditure.

(4)   

If that statement shows that the condition in section 1216CE is not

met, the company—

(a)   

is not entitled to special television relief for any period, and

20

(b)   

must amend accordingly its company tax return for any

period for which such relief was claimed.

1216EC  

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

25

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

30

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.

35

      (3)  

An order under sub-paragraph (2)—

(a)   

may make different provision for different purposes;

(b)   

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

necessary or expedient in consequence of other provisions of this Act

not yet having come into force.

40

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”).

45

 
 

Finance Bill
Schedule 16 — Tax relief for video games development
Part 1 — Amendments of CTA 2009

281

 

      (3)  

For the purposes of Part 15A 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

5

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 16

Section 35

 

Tax relief for video games development

10

Part 1

Amendments of CTA 2009

1          

After Part 15A of CTA 2009 (inserted by Schedule 15 above) insert—

“Part 15B

Video games development

15

Chapter 1

Introduction

Introductory

1217A   

Overview of Part

(1)   

This Part is about video games development.

20

(2)   

Sections 1217AA to 1217AF contain definitions and other provisions

about interpretation that apply for the purposes of this Part.

   

See, in particular—

(a)   

section 1217AA, which contains provision about the meaning

of “video game”, and

25

(b)   

section 1217AB, which explains how a company comes to be

treated as the video games development company in relation

to a video game.

(3)   

Chapter 2 is about the taxation of the activities of a video games

development company and includes—

30

(a)   

provision for the company’s activities in relation to its video

game to be treated as a separate trade, and

(b)   

provision about the calculation of the profits and losses of

that trade.

(4)   

Chapter 3 is about relief (called “video games tax relief”) which can

35

be given to a video games development company—

(a)   

by way of additional deductions to be made in calculating the

profits or losses of the company’s separate trade, or

 
 

Finance Bill
Schedule 16 — Tax relief for video games development
Part 1 — Amendments of CTA 2009

282

 

(b)   

by way of a payment (a “video game tax credit”) to be made

on the company’s surrender of losses from that trade.

(5)   

Chapter 4 is about the relief which can be given for losses made by a

video games development company in its separate trade, including

provision for certain such losses to be transferred to other separate

5

trades.

(6)   

Chapter 5 provides—

(a)   

for relief under Chapters 3 and 4 to be given on a provisional

basis, and

(b)   

for such relief to be withdrawn if it turns out that conditions

10

that must be met for such relief to be given are not actually

met.

Interpretation

1217AA  

“Video game” etc

(1)   

This section applies for the purposes of this Part.

15

(2)   

“Video game” does not include—

(a)   

anything produced for advertising or promotional purposes,

or

(b)   

anything produced for the purposes of gambling (within the

meaning of the Gambling Act 2005).

20

(3)   

References to a video game include the game’s soundtrack.

(4)   

A video game is completed when it is first in a form in which it can

reasonably be regarded as ready for copies of it to be made and made

available to the general public.

1217AB  

Video games development company

25

(1)   

For the purposes of this Part “video games development company”

is to be read in accordance with this section.

(2)   

There cannot be more than one video games development company

in relation to a video game.

(3)   

A company is the video games development company in relation to

30

a video game if the company (otherwise than in partnership)—

(a)   

is responsible for designing, producing and testing the video

game,

(b)   

is actively engaged in planning and decision-making during

the design, production and testing of the video game, and

35

(c)   

directly negotiates, contracts and pays for rights, goods and

services in relation to the video game.

(4)   

If there is more than one company meeting the description in

subsection (3), the company that is most directly engaged in the

activities referred to in that subsection is the video games

40

development company in relation to the video game.

(5)   

If there is no company meeting the description in subsection (3),

there is no video games development company in relation to the

video game.

 
 

Finance Bill
Schedule 16 — Tax relief for video games development
Part 1 — Amendments of CTA 2009

283

 

(6)   

A company may elect to be regarded as a company which does not

meet the description in subsection (3).

(7)   

The election—

(a)   

must be made by the company by being included in its

company tax return for an accounting period (and may be

5

included in the return originally made or by amendment),

and

(b)   

may be withdrawn by the company only by amending its

company tax return for that accounting period.

(8)   

The election has effect in relation to video games which begin to be

10

produced in that or any subsequent accounting period.

1217AC  

“Video game development activities” etc

(1)   

In this Part “video game development activities”, in relation to a

video game, means the activities involved in designing, producing

and testing the video game.

15

(2)   

The Treasury may by regulations—

(a)   

amend subsection (1),

(b)   

provide that specified activities are or are not to be regarded

as video game development activities or as video game

development activities of a particular description, and

20

(c)   

provide that, in relation to a specified description of video

game, references to video game development activities of a

particular description are to be read as references to such

activities as may be specified.

   

“Specified” means specified in the regulations.

25

1217AD  

“Core expenditure”

(1)   

In this Part “core expenditure”, in relation to a video game, means

expenditure on designing, producing and testing the video game.

(2)   

But the following descriptions of expenditure are not to be regarded

as core expenditure for the purposes of this Part—

30

(a)   

any expenditure incurred in designing the initial concept for

a video game;

(b)   

any expenditure incurred in debugging a completed video

game or carrying out any maintenance in connection with

such a video game.

35

1217AE  

“UK expenditure” etc

(1)   

In this Part “UK expenditure”, in relation to a video game, means

expenditure on goods or services that are used or consumed in the

United Kingdom.

(2)   

Any apportionment of expenditure as between UK expenditure and

40

non-UK expenditure for the purposes of this Part is to be made on a

just and reasonable basis.

(3)   

The Treasury may by regulations amend subsection (1).

 
 

 
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