Session 2014 - 15
Internet Publications
Other Bills before Parliament


 
 

Consideration of Bill:                               

503

 

Finance Bill, continued

 
 

(b)    

carried forward under section 45 of CTA 2010 and set against

 

profits of the separate theatrical trade.

 

(4)    

For the first period of account during which the separate theatrical

 

trade is carried on, the available qualifying expenditure is the amount

 

that is E for that period for the purposes of section 1217J(2).

 

(5)    

For any period of account after the first, the available qualifying

 

expenditure is—

E-S

 

    

where—

 

E is the amount that is E for that period for the purposes of section

 

1217J(3), and

 

S is the total amount previously surrendered under section 1217K.

 

(6)    

If a period of account of the separate theatrical 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.

 

1217KB 

Payment in respect of theatre tax credit

 

(1)    

If a company—

 

(a)    

is entitled to a theatre tax credit for an accounting period, and

 

(b)    

makes a claim,

 

    

the Commissioners for Her Majesty’s Revenue and Customs (“the

 

Commissioners”) must pay the amount of the credit to the company.

 

(2)    

An amount payable in respect of—

 

(a)    

a theatre tax credit, or

 

(b)    

interest on a theatre 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.

 

(3)    

If the company’s company tax return for the accounting period is

 

enquired into by the Commissioners, no payment in respect of a

 

theatre tax credit for that period need be made before the

 

Commissioners’ enquiries are completed (see paragraph 32 of

 

Schedule 18 to FA 1998).

 

    

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 theatre tax credit for an

 

accounting period before the company has paid to the Commissioners

 

any amount that it is required to pay for payment 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

 

1992 or Part 1 of the Social Security Contributions and

 

Benefits (Northern Ireland) Act 1992.

 

(5)    

A payment in respect of a theatre tax credit is not income of the

 

company for any tax purpose.


 
 

Consideration of Bill:                               

504

 

Finance Bill, continued

 
 

1217KC 

Limit on State aid

 

(1)    

The total amount of any theatre tax credits payable under section

 

1217KB in the case of any undertaking is not to exceed 50 million

 

euros per year.

 

(2)    

In this section “undertaking” has the same meaning as in the General

 

Block Exemption Regulation.

 

(3)    

In this section “the General Block Exemption Regulation” means any

 

regulation that—

 

(a)    

is for the time being in force under Article 1 of Council

 

Regulation (EC) No 994/98, and

 

(b)    

makes, in relation to aid in favour of culture and heritage

 

conservation, the declaration provided for by that Article.

 

Anti-avoidance etc

 

1217LA 

Tax avoidance arrangements

 

(1)    

A company does not qualify for relief in relation to a theatrical

 

production if there are any tax avoidance arrangements relating to the

 

production.

 

(2)    

Arrangements are “tax avoidance arrangements” if their main purpose,

 

or one of their main purposes, is the obtaining of a tax advantage.

 

(3)    

In this section—

 

“arrangements” includes any scheme, agreement or understanding,

 

whether or not legally enforceable;

 

“tax advantage” has the meaning given by section 1139 of CTA 2010.

 

1217LB 

Transactions not entered into for genuine commercial reasons

 

(1)    

A transaction is to be ignored for the purpose of determining a relief

 

mentioned in subsection (2) so far as the transaction is attributable to

 

arrangements (other than tax avoidance arrangements) entered into

 

otherwise than for genuine commercial reasons.

 

(2)    

The reliefs mentioned in subsection (1) are—

 

(a)    

any additional deduction which a company may make under

 

this Part, and

 

(b)    

any theatre tax credit to be given to a company.

 

(3)    

In this section “arrangements” and “tax avoidance arrangements” have

 

the same meaning as in section 1217LA.

 

Use of losses

 

1217M

 Application of sections 1217MA to 1217MC

 

(1)    

Sections 1217MA to 1217MC apply to a company that is treated under

 

section 1217H(3) as carrying on a separate trade in relation to a

 

theatrical production.

 

(2)    

In those sections—

 

“the completion period” means the accounting period in which the

 

company ceases to carry on the separate theatrical trade;


 
 

Consideration of Bill:                               

505

 

Finance Bill, continued

 
 

“loss relief” includes any means by which a loss might be used to reduce

 

the amount in respect of which a company, or any other person, is

 

chargeable to tax.

 

1217MA 

 Restriction on use of losses before completion period

 

(1)    

Subsection (2) applies if a loss is made by the company in the separate

 

theatrical trade in an accounting period preceding the completion

 

period.

 

(2)    

The loss is not available for loss relief, except to the extent that the loss

 

may be carried forward under section 45 of CTA 2010 to be set against

 

profits of the separate theatrical trade in a subsequent period.

 

1217MB 

 Use of losses in the completion period

 

(1)    

Subsection (2) applies if a loss made in the separate theatrical trade is

 

carried forward under section 45 of CTA 2010 to the completion

 

period.

 

(2)    

So much (if any) of the loss as is not attributable to relief under section

 

1217H (see subsection (4)) may be treated for the purposes of loss

 

relief as if it were a loss made in the completion period.

 

(3)    

If a loss is made in the separate theatrical trade in the completion

 

period, 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 relief under

 

section 1217H.

 

(4)    

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

 

section 1217H is found by—

 

(a)    

calculating what the amount of the loss would have been if

 

there had been no additional deduction under that section in

 

that or any earlier period, and

 

(b)    

deducting that amount from the total amount of the loss.

 

(5)    

This section does not apply to loss surrendered, or treated as carried

 

forward, under section 1217MC (terminal losses).

 

1217MC 

 Terminal losses

 

(1)    

This section applies if—

 

(a)    

the company ceases to carry on the separate theatrical trade,

 

and

 

(b)    

if the company had not ceased to carry on the separate

 

theatrical trade, it could have carried forward an amount under

 

section 45 of CTA 2010 to be set against profits of that trade

 

in a later period (“the terminal loss”).

 

    

Below in this section the company is referred to as “company A” and

 

the separate theatrical trade is referred to as “trade 1”.

 

(2)    

If company A—

 

(a)    

is treated under section 1217H(3) as carrying on a separate

 

theatrical trade in relation to another theatrical production

 

(“trade 2”), and


 
 

Consideration of Bill:                               

506

 

Finance Bill, continued

 
 

(b)    

is carrying on trade 2 when it ceases to carry on trade 1,

 

    

company A may (on making a claim) elect to transfer the terminal loss

 

(or a part of it) to trade 2.

 

(3)    

If company A makes an election under subsection (2), the terminal

 

loss (or part of the loss) is treated as if it were a loss brought forward

 

under section 45 of CTA 2010 to be set against the profits of trade 2

 

of the first accounting period beginning after the cessation and so on.

 

(4)    

Subsection (5) applies if—

 

(a)    

another company (“company B”) is treated under section

 

1217H(3) as carrying on a separate theatrical trade (“company

 

B’s trade”) in relation to another theatrical production,

 

(b)    

company B is carrying on that trade when company A ceases

 

to carry on trade 1, 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 loss (or part of it) to 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 company B’s

 

trade of the first accounting period beginning after the cessation and

 

so on.

 

(7)    

The Treasury may by regulations make administrative provision in

 

relation to the surrender of a loss under subsection (5) and the resulting

 

claim under subsection (6).

 

(8)    

“Administrative provision” means provision corresponding, subject to

 

such adaptations or other modifications as appear to the Treasury to be

 

appropriate, to that made by Part 8 of Schedule 18 to FA 1998

 

(company tax returns: claims for group relief).

 

Provisional entitlement to relief

 

1217N

 Provisional entitlement to relief

 

(1)    

In relation to a company that has made a claim under section 1217H in

 

relation to a theatrical production, “interim accounting period” means

 

any accounting period that—

 

(a)    

is one in which the company carries on the separate theatrical

 

trade, and

 

(b)    

precedes the accounting period in which it ceases to do so.

 

(2)    

A company is not entitled to relief under any of the relieving

 

provisions for an interim accounting period unless—

 

(a)    

its company tax return for the period states the amount of

 

planned core expenditure on the theatrical production that is

 

EEA expenditure, and

 

(b)    

that amount is such as to indicate that the EEA expenditure

 

condition (see section 1217GB) will be met in relation to the

 

production.

 

    

If those requirements are met, the company is provisionally treated in

 

relation to that period as if the EEA expenditure condition were met.


 
 

Consideration of Bill:                               

507

 

Finance Bill, continued

 
 

(3)    

In this section “the relieving provisions” means—

 

(a)    

section 1217H (additional deduction),

 

(b)    

section 1217K (theatre tax credits), and

 

(c)    

section 1217MC (terminal losses).

 

1217NA 

 Clawback of provisional relief

 

(1)    

If a statement is made under section 1217N(2) but it subsequently

 

appears that the EEA expenditure condition will not be met on the

 

company’s ceasing to carry on the separate theatrical trade, the

 

company—

 

(a)    

is not entitled to relief under any of the relieving provisions

 

for any period for which its entitlement depended on such a

 

statement, and

 

(b)    

must amend its company tax return for any such period

 

accordingly.

 

(2)    

When a company which has made a claim under section 1217H ceases

 

to carry on the separate theatrical trade, the company’s company tax

 

return for the period in which that cessation occurs must—

 

(a)    

state that the company has ceased to carry on the separate

 

theatrical trade, and

 

(b)    

be accompanied by a final statement of the amount of the core

 

expenditure on the theatrical production that is EEA

 

expenditure.

 

(3)    

If that statement shows that the EEA expenditure condition is not

 

met—

 

(a)    

the company is not entitled to relief under any of the relieving

 

provisions for any period,

 

(b)    

the company is treated for corporation tax purposes as if

 

section 1217H(3)(a) (treatment as a separate trade) did not

 

apply in relation to the theatrical production for any period,

 

and

 

(c)    

accordingly, sections 1217MA and 1217MB (provisions

 

about use of losses) do not apply in relation to the theatrical

 

production for any period.

 

(4)    

Where subsection (3) applies, the company must amend its company

 

tax return for any period in which (or in any part of which) it was

 

treated as carrying on a separate trade relating to the theatrical

 

production.

 

(5)    

Any amendment or assessment necessary to give effect to this section

 

may be made despite any limitation on the time within which an

 

amendment or assessment may normally be made.

 

(6)    

In this section “the relieving provisions” has the same meaning as in

 

section 1217N.

 

Interpretation

 

1217O

 Activities involved in developing, producing, running or closing a

 

production

 

    

The Treasury may by regulations amend section 1217GC (core

 

expenditure) or 1217IC (costs of production) for the purpose of


 
 

Consideration of Bill:                               

508

 

Finance Bill, continued

 
 

providing that activities of a specified description are, or are not, to be

 

regarded as activities involved in developing or (as the case may be)

 

producing, running or closing—

 

(a)    

a theatrical production, or

 

(b)    

a theatrical production of a specified description.

 

1217OA 

 “Company tax return”

 

    

In this Part “company tax return” has the same meaning as in Schedule

 

18 to FA 1998 (see paragraph 3(1) of that Schedule).

 

1217OB 

 Index

 

    

In this Part—

 

“commercial purpose condition” has the meaning given by section

 

1217GA;

 

“company tax return” has the meaning given by section 1217OA;

 

“core expenditure” has the meaning given by section 1217GC;

 

“costs”, in relation to a theatrical production, has the meaning given by

 

section 1217IC;

 

“EEA expenditure” has the meaning given by section 1217GB;

 

“EEA expenditure condition” has the meaning given by section 1217GB;

 

references to “income from a theatrical production” are to be read in

 

accordance with section 1217IB;

 

“production company” has the meaning given by section 1217FC;

 

“qualifying expenditure” has the meaning given by section 1217JA;

 

references to the “separate theatrical trade” are to be read in accordance

 

with section 1217I;

 

“theatrical production” has the meaning given by section 1217FA (read

 

with section 1217FB).”

 

Consequential amendments

 

ICTA

 

2    (1)  

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

 

      (2)  

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

 

“(fc)    

a payment of theatre tax credit falls to be made to a company;

 

or”.

 

      (3)  

In subsection (3C), for “or video game tax credit” substitute “, video game tax

 

credit or theatre tax credit”.

 

      (4)  

In subsection (8A)—

 

(a)    

in paragraph (a) for “or (f)” substitute “(f), (fa), (fb) or (fc)”, and

 

(b)    

in paragraph (b)(ii), after “video game tax credit” insert “or theatre tax

 

credit”.

 

      (5)  

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

 

theatre tax credit”.

 

FA 1998

 

3          

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

 

matters) is amended as follows.


 
 

Consideration of Bill:                               

509

 

Finance Bill, continued

 
 

4          

In paragraph 10 (other claims and elections to be included in return), in sub-

 

paragraph (4)—

 

(a)    

before “claims” insert “certain”;

 

(b)    

for “or 15B” substitute “, 15B or 15C”.

 

5    (1)  

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

 

      (2)  

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

 

“(bg)    

theatre tax credit under Part 15C of that Act,”.

 

      (3)  

In sub-paragraph (5)—

 

(a)    

after paragraph (ah) insert—

 

“(ai)    

an amount of theatre tax credit paid to a company

 

for an accounting period,”;

 

(b)    

in the words after paragraph (b), after “(ah)” insert “, (ai)”.

 

6    (1)  

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

 

      (2)  

In paragraph 83S (introduction), after paragraph (c) insert—

 

“(d)    

an additional deduction under Part 15C of CTA 2009,

 

(e)    

a theatre tax credit under that Part of that Act.”

 

      (3)  

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

 

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

 

CAA 2001

 

7          

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

 

the “and” at the end of paragraph (d) and after paragraph (e) insert “, and

 

(f)    

section 1217K of that Act (theatre tax credits).”

 

FA 2007

 

8          

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

 

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

 

after that sub-paragraph insert—

 

“(ivc)    

a theatre tax credit under section 1217K of that

 

Act, or”.

 

CTA 2009

 

9          

In section 104BA of CTA 2009 (R&D expenditure credits: restrictions on

 

claiming other tax reliefs), after subsection (3) insert—

 

“(4)    

For provision prohibiting an R&D expenditure credit being given

 

under this Chapter and relief being given under section 1217H or

 

1217K (theatrical productions: additional deduction or theatre tax

 

credit), see section 1217JA(2).”

 

10         

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

 

assets), before section 809 insert—

 

“808C

Assets representing expenditure incurred in course of separate

 

theatrical trade

 

(1)    

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

 

production company so far as the asset represents expenditure on a

 

theatrical production that is treated under Part 15C as expenditure of a

 

separate trade (see particularly sections 1217H and 1217IE).

 

(2)    

In this section—


 
previous section contents continue
 

© Parliamentary copyright
Revised 2 July 2014