Corporation Tax (Northern Ireland) Bill (HC Bill 149)

Corporation Tax (Northern Ireland) BillPage 40

(5) For the purposes of this section “the relevant percentage” means—


where—

  • A is the percentage specified in section 1154(1) of CTA 2009;

  • 5B is the percentage specified in section 1149(8) of CTA 2009;

  • C is the adjusted section 1152 percentage as defined by section
    357QB(6).

357QD Restriction on losses carried forward where tax credit claimed

(1) In section 1158 of CTA 2009 (restriction on losses carried forward where
10tax credit claimed), subsection (2) and subsection (5) so far as applying
for the purposes of subsection (2) do not apply to a company in relation
to a qualifying trade it carries on in an accounting period in which it is
a Northern Ireland company (and the following provisions of this
section apply instead).

(2) 15If the company in the accounting period—

(a) claims a land remediation tax credit to which it is entitled, and

(b) has a Northern Ireland loss,

that loss is treated for the purposes of section 45 of CTA 2010 (relief for
trading losses against future trading profits) as reduced by the amount
20of the surrendered Northern Ireland loss for the period.

(3) If the company in the accounting period—

(a) claims a land remediation tax credit to which it is entitled, and

(b) has a mainstream loss,

that loss is treated for the purposes of section 45 of CTA 2010 as reduced
25by the amount of the surrendered mainstream loss for the period.

(4) For the purposes of this section—

(a) the “amount of the surrendered Northern Ireland loss” for the
period means the amount of the Northern Ireland qualifying
land remediation loss in respect of which the company claims a
30tax credit for the period, and

(b) the “amount of the surrendered mainstream loss” for the period
means the amount of the mainstream qualifying land
remediation loss in respect of which the company claims a tax
credit for the period.

CHAPTER 11 35Film tax relief

Introductory
357R Introduction and interpretation

(1) This Chapter makes provision about the operation of Part 15 of CTA
2009 (film tax relief) in relation to expenditure incurred by a company
40in an accounting period in which it is a Northern Ireland company.

(2) In this Chapter—

Corporation Tax (Northern Ireland) BillPage 41

(a) “Northern Ireland expenditure” means expenditure incurred in
a trade to the extent that the expenditure forms part of the
Northern Ireland profits or Northern Ireland losses of the trade;

(b) “the separate film trade” has the same meaning as in Chapter 3
5of Part 15 of CTA 2009 (see section 1195(5) of that Act);

(c) “qualifying expenditure” has the same meaning as in that
Chapter (see section 1199(3) of that Act).

(3) References in Part 15 of CTA 2009 to “film tax relief” include relief
under this Chapter.

10Film tax relief
357RA Northern Ireland additional deduction

(1) In this Chapter “a Northern Ireland additional deduction” means so
much of a deduction under section 1199 of CTA 2009 (additional
deduction for qualifying expenditure) as is calculated by reference to
15qualifying expenditure that is Northern Ireland expenditure.

(2) A Northern Ireland additional deduction forms part of the Northern
Ireland profits or Northern Ireland losses of the separate film trade.

357RB Northern Ireland supplementary deduction

(1) This section applies where—

(a) 20a company is entitled under section 1199 of CTA 2009 to an
additional deduction in calculating the profit or loss of the
separate film trade in an accounting period,

(b) the company is a Northern Ireland company in the period,

(c) the additional deduction is wholly or partly a Northern Ireland
25additional deduction, and

(d) any of the following conditions is met—

(i) the company does not have a surrenderable loss in the
accounting period;

(ii) the company has a surrenderable loss in the accounting
30period, but does not make a claim under section 1201 of
CTA 2009 (film tax credit claimable if company has
surrenderable loss) for the period;

(iii) the company has a surrenderable loss in the accounting
period and makes a claim under that section for the
35period, but the amount of Northern Ireland losses
surrendered on the claim is less than the Northern
Ireland additional deduction.

(2) The company is entitled to make another deduction (“a Northern
Ireland supplementary deduction”) in respect of qualifying
40expenditure.

(3) See section 357RC for provision about the amount of the Northern
Ireland supplementary deduction.

(4) The Northern Ireland supplementary deduction—

(a) is made in calculating the profit or loss of the separate film
45trade, and

Corporation Tax (Northern Ireland) BillPage 42

(b) forms part of the Northern Ireland profits or Northern Ireland
losses of the separate film trade.

(5) In this section “surrenderable loss” has the meaning given by section
1201 of CTA 2009.

357RC 5 Northern Ireland supplementary deduction: amount

(1) This section contains provision for the purposes of section 357RB(2)
about the amount of the Northern Ireland supplementary deduction.

(2) If the accounting period falls within only one financial year, the amount
of the Northern Ireland supplementary deduction is—


10

where—

  • A is the amount of the Northern Ireland additional deduction
    brought into account in the accounting period;

  • B is the amount of Northern Ireland losses surrendered in any
    15claim under section 1201 of CTA 2009 for the accounting period;

  • MR is the main rate for the financial year;

  • NIR is the Northern Ireland rate for the financial year.

(3) If the accounting period falls within more than one financial year, the
amount of the Northern Ireland supplementary deduction is
20determined by taking the following steps.

Step 1

Calculate, for each financial year, the amount that would be the
Northern Ireland supplementary deduction for the accounting period
if it fell within only that financial year (see subsection (2)).

25Step 2

Multiply each amount calculated under step 1 by the proportion of the
accounting period that falls within the financial year for which it is
calculated.

Step 3

30Add together each amount found under step 2.

357RD Film tax credit: Northern Ireland supplementary deduction ignored

For the purpose of determining the available loss of a company under
section 1201 of CTA 2009 (film tax credit claimable if company has
surrenderable loss) for any accounting period, any Northern Ireland
35supplementary deduction made by the company in the period (and any
Northern Ireland supplementary deduction made in any previous
accounting period) is to be ignored.

357RE Artificially inflated claims for additional deduction

Section 1205(1)(a) and (2)(a) of CTA 2009 (artificially inflated claims for
40additional deduction or film tax credit) has effect as if references to an
additional deduction under Chapter 3 of Part 15 of that Act included a
Northern Ireland supplementary deduction under this Chapter.

Corporation Tax (Northern Ireland) BillPage 43

Film losses
357RF Restriction on use of losses while film is in production

(1) Section 1209 of CTA 2009 (restriction on use of losses while film is in
production) has effect subject as follows.

(2) 5The reference in subsection (1) of that section to a loss made in the
separate film trade in a pre-completion period is, if the company is a
Northern Ireland company in that period, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

10and references to losses in subsection (2) of that section are to be read
accordingly.

(3) Subsection (4) applies if a Northern Ireland company has, in a pre-
completion period—

(a) both Northern Ireland losses of the trade and mainstream
15profits of the trade, or

(b) both mainstream losses of the trade and Northern Ireland
profits of the trade.

(4) The company may make a claim under section 37 (relief for trade losses
against total profits) for relief for the losses mentioned in subsection
20(3)(a) or (b).

(5) But relief on such a claim is available only—

(a) in the case of a claim for relief for Northern Ireland losses,
against mainstream profits of the trade of the same period;

(b) in the case of a claim for relief for mainstream losses, against
25Northern Ireland profits of the trade of the same period.

(6) In this section “a pre-completion period” has the same meaning as in
section 1209 of CTA 2009 (see section 1208(2) of that Act).

357RG Use of losses in later periods

(1) Section 1210 of CTA 2009 (restriction on use of losses in later periods)
30has effect subject as follows.

(2) The reference in subsection (2) of that section to a loss made in the
separate film trade is, in relation to a loss made in a period in which the
company is a Northern Ireland company, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) 35any mainstream losses of the trade of the period;

and references to losses in subsections (3) and (6) of that section are to
be read accordingly.

(3) The reference in subsection (4) of that section to a loss made in the
separate film trade in a relevant later period is, where the company is a
40Northern Ireland company in the period, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsections (5) and (6) of that section are to
be read accordingly.

Corporation Tax (Northern Ireland) BillPage 44

(4) Subsection (6) of that section has effect, in relation to Northern Ireland
losses, as if the reference to an additional deduction under Chapter 3 of
Part 15 of that Act included a reference to a Northern Ireland
supplementary deduction under this Chapter.

357RH 5 Terminal losses

(1) Section 1211 of CTA 2009 (terminal losses) has effect subject as follows.

(2) Where—

(a) a company makes an election under subsection (3) of that
section (election to treat terminal loss as loss brought forward of
10different trade) in relation to all or part of a terminal loss, and

(b) the terminal loss is a Northern Ireland loss,

that subsection has effect as if the reference in it to a loss brought
forward were to a Northern Ireland loss brought forward.

(3) Where—

(a) 15a company makes a claim under subsection (6) of that section
(claim to treat terminal loss as loss brought forward by different
company) in relation to part or all of a terminal loss, and

(b) the terminal loss is a Northern Ireland loss,

that subsection has effect as if the reference in it to a loss brought
20forward were to a Northern Ireland loss brought forward.

CHAPTER 12 Television production

Introductory
357S Introduction and interpretation

(1) This Chapter makes provision about the operation of Part 15A of CTA
252009 (television production) in relation to expenditure incurred by a
company in an accounting period in which it is a Northern Ireland
company.

(2) In this Chapter—

(a) “Northern Ireland expenditure” means expenditure incurred in
30a trade to the extent that the expenditure forms part of the
Northern Ireland profits or Northern Ireland losses of the trade;

(b) “the separate programme trade” has the same meaning as in
Chapter 3 of Part 15A of CTA 2009 (see section 1216C(6) of that
Act);

(c) 35“qualifying expenditure” has the same meaning as in that
Chapter (see section 1216CF(3) of that Act).

(3) References in Part 15A of CTA 2009 to “television tax relief” include
relief under this Chapter.

Corporation Tax (Northern Ireland) BillPage 45

Television tax relief
357SA Northern Ireland additional deduction

(1) In this Chapter “a Northern Ireland additional deduction” means so
much of a deduction under section 1216CF of CTA 2009 (additional
5deduction for qualifying expenditure) as is calculated by reference to
qualifying expenditure that is Northern Ireland expenditure.

(2) A Northern Ireland additional deduction forms part of the Northern
Ireland profits or Northern Ireland losses of the separate programme
trade.

357SB 10 Northern Ireland supplementary deduction

(1) This section applies where—

(a) a company is entitled under section 1216CF of CTA 2009 to an
additional deduction in calculating the profit or loss of the
separate programme trade in an accounting period,

(b) 15the company is a Northern Ireland company in the period,

(c) the additional deduction is wholly or partly a Northern Ireland
additional deduction, and

(d) any of the following conditions is met—

(i) the company does not have a surrenderable loss in the
20accounting period;

(ii) the company has a surrenderable loss in the accounting
period, but does not make a claim under section 1216CH
of CTA 2009 (television tax credit claimable if company
has surrenderable loss) for the period;

(iii) 25the company has a surrenderable loss in the accounting
period and makes a claim under that section for the
period, but the amount of Northern Ireland losses
surrendered on the claim is less than the Northern
Ireland additional deduction.

(2) 30The company is entitled to make another deduction (“a Northern
Ireland supplementary deduction”) in respect of qualifying
expenditure.

(3) See section 357SC for provision about the amount of the Northern
Ireland supplementary deduction.

(4) 35The Northern Ireland supplementary deduction—

(a) is made in calculating the profit or loss of the separate
programme trade, and

(b) forms part of the Northern Ireland profits or Northern Ireland
losses of the separate programme trade.

(5) 40In this section “surrenderable loss” has the meaning given by section
1216CH of CTA 2009.

357SC Northern Ireland supplementary deduction: amount

(1) This section contains provision for the purposes of section 357SB(2)
about the amount of the Northern Ireland supplementary deduction.

Corporation Tax (Northern Ireland) BillPage 46

(2) If the accounting period falls within only one financial year, the amount
of the Northern Ireland supplementary deduction is—


where—

  • 5A is the amount of the Northern Ireland additional deduction
    brought into account in the accounting period;

  • B is the amount of Northern Ireland losses surrendered in any
    claim under section 1216CH of CTA 2009 for the accounting
    period;

  • 10MR is the main rate for the financial year;

  • NIR is the Northern Ireland rate for the financial year.

(3) If the accounting period falls within more than one financial year, the
amount of the Northern Ireland supplementary deduction is
determined by taking the following steps.

15Step 1

Calculate, for each financial year, the amount that would be the
Northern Ireland supplementary deduction for the accounting period
if it fell within only that financial year (see subsection (2)).

Step 2

20Multiply each amount calculated under step 1 by the proportion of the
accounting period that falls within the financial year for which it is
calculated.

Step 3

Add together each amount found under step 2.

357SD 25 Tax credit: Northern Ireland supplementary deduction ignored

For the purpose of determining the available loss of a company under
section 1216CH of CTA 2009 (television tax credit claimable if company
has surrenderable loss) for any accounting period, any Northern
Ireland supplementary deduction made by the company in the period
30(and any Northern Ireland supplementary deduction made in any
previous accounting period) is to be ignored.

357SE Artificially inflated claims for additional deduction

Section 1216CL(1)(a) and (2)(a) of CTA 2009 (artificially inflated claims
for additional deduction or tax credit) has effect as if references to an
35additional deduction under Chapter 3 of Part 15A of that Act included
a Northern Ireland supplementary deduction under this Chapter.

Programme losses
357SF Restriction on use of losses while programme in production

(1) Section 1216DA of CTA 2009 (restriction on use of losses while
40programme in production) has effect subject as follows.

(2) The reference in subsection (1) of that section to a loss made in the
separate programme trade in a pre-completion period is, if the
company is a Northern Ireland company in that period, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) 45any mainstream losses of the trade of the period;

Corporation Tax (Northern Ireland) BillPage 47

and references to losses in subsection (2) of that section are to be read
accordingly.

(3) Subsection (4) applies if a Northern Ireland company has, in a pre-
completion period—

(a) 5both Northern Ireland losses of the trade and mainstream
profits of the trade, or

(b) both mainstream losses of the trade and Northern Ireland
profits of the trade.

(4) The company may make a claim under section 37 (relief for trade losses
10against total profits) for relief for the losses mentioned in subsection
(3)(a) or (b).

(5) But relief on such a claim is available only—

(a) in the case of a claim for relief for Northern Ireland losses,
against mainstream profits of the trade of the same period;

(b) 15in the case of a claim for relief for mainstream losses, against
Northern Ireland profits of the trade of the same period.

(6) In this section “a pre-completion period” has the same meaning as in
section 1216DA of CTA 2009 (see section 1216D(2) of that Act).

357SG Use of losses in later periods

(1) 20Section 1216DB of CTA 2009 (use of losses in later periods) has effect
subject as follows.

(2) The reference in subsection (2) of that section to a loss made in the
separate programme trade is, in relation to a loss made in a period in
which the company is a Northern Ireland company, a reference to—

(a) 25any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsections (3) and (6) of that section are to
be read accordingly.

(3) The reference in subsection (4) of that section to a loss made in the
30separate programme trade in a relevant later period is, where the
company is a Northern Ireland company in the period, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsections (5) and (6) of that section are to
35be read accordingly.

(4) Subsection (6) of that section has effect, in relation to Northern Ireland
losses, as if the reference to an additional deduction under Chapter 3 of
Part 15A of that Act included a reference to a Northern Ireland
supplementary deduction under this Chapter.

357SH 40 Terminal losses

(1) Section 1216DC of CTA 2009 (terminal losses) has effect subject as
follows.

(2) Where—

Corporation Tax (Northern Ireland) BillPage 48

(a) a company makes an election under subsection (3) of that
section (election to treat terminal loss as loss brought forward of
different trade) in relation to all or part of a terminal loss, and

(b) the terminal loss is a Northern Ireland loss,

5that subsection has effect as if the reference in it to a loss brought
forward were to a Northern Ireland loss brought forward.

(3) Where—

(a) a company makes a claim under subsection (6) of that section
(claim to treat terminal loss as loss brought forward by different
10company) in relation to part or all of a terminal loss, and

(b) the terminal loss is a Northern Ireland loss,

that subsection has effect as if the reference in it to a loss brought
forward were to a Northern Ireland loss brought forward.

CHAPTER 13 Video games development

15Introductory
357T Introduction and interpretation

(1) This Chapter makes provision about the operation of Part 15B of CTA
2009 (video games development) in relation to expenditure incurred by
a company in an accounting period in which it is a Northern Ireland
20company.

(2) In this Chapter—

(a) “Northern Ireland expenditure” means expenditure incurred in
a trade to the extent that the expenditure forms part of the
Northern Ireland profits or Northern Ireland losses of the trade;

(b) 25“the separate video game trade” has the same meaning as in
Chapter 3 of Part 15B of CTA 2009 (see section 1217C(6) of that
Act);

(c) “qualifying expenditure” has the same meaning as in that
Chapter (see section 1217CF(3) of that Act).

(3) 30References in Part 15B of CTA 2009 to “video games tax relief” include
relief under this Chapter.

Video games tax relief
357TA Northern Ireland additional deduction

(1) In this Chapter “a Northern Ireland additional deduction” means so
35much of a deduction under section 1217CF of CTA 2009 (additional
deduction for qualifying expenditure) as is calculated by reference to
qualifying expenditure that is Northern Ireland expenditure.

(2) A Northern Ireland additional deduction forms part of the Northern
Ireland profits or Northern Ireland losses of the separate video game
40trade.

Corporation Tax (Northern Ireland) BillPage 49

357TB Northern Ireland supplementary deduction

(1) This section applies where—

(a) a company is entitled under section 1217CF of CTA 2009 to an
additional deduction in calculating the profit or loss of the
5separate video game trade in an accounting period,

(b) the company is a Northern Ireland company in the period,

(c) the additional deduction is wholly or partly a Northern Ireland
additional deduction, and

(d) any of the following conditions is met—

(i) 10the company does not have a surrenderable loss in the
accounting period;

(ii) the company has a surrenderable loss in the accounting
period, but does not make a claim under section 1217CH
of CTA 2009 (video game tax credit claimable if
15company has surrenderable loss) for the period;

(iii) the company has a surrenderable loss in the accounting
period and makes a claim under that section for the
period, but the amount of Northern Ireland losses
surrendered on the claim is less than the Northern
20Ireland additional deduction.

(2) The company is entitled to make another deduction (“a Northern
Ireland supplementary deduction”) in respect of qualifying
expenditure.

(3) See section 357TC for provision about the amount of the Northern
25Ireland supplementary deduction.

(4) The Northern Ireland supplementary deduction—

(a) is made in calculating the profit or loss of the separate video
game trade, and

(b) forms part of the Northern Ireland profits or Northern Ireland
30losses of the separate video game trade.

(5) In this section “surrenderable loss” has the meaning given by section
1217CH of CTA 2009.

357TC Northern Ireland supplementary deduction: amount

(1) This section contains provision for the purposes of section 357TB(2)
35about the amount of the Northern Ireland supplementary deduction.

(2) If the accounting period falls within only one financial year, the amount
of the Northern Ireland supplementary deduction is—


where—

  • 40A is the amount of the Northern Ireland additional deduction
    brought into account in the accounting period;

  • B is the amount of Northern Ireland losses surrendered in any
    claim under section 1217CH of CTA 2009 for the accounting
    period;

  • 45MR is the main rate for the financial year;

  • NIR is the Northern Ireland rate for the financial year.