Finance (No. 2) Bill (HC Bill 155)

(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 orchestral trade in a subsequent
period.

1217SB 5 Use of losses in the completion period

(1) Subsection (2) applies if a loss made in the separate orchestral 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 orchestra tax relief
10(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 orchestral 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
15under 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 orchestra
tax relief (see subsection (4)).

(4) The amount of a loss in any period that is attributable to orchestra tax
20relief is found by—

(a) calculating what the amount of the loss would have been if
there had been no additional deduction under Chapter 3 in
that or any earlier period, and

(b) deducting that amount from the total amount of the loss.

(5) 25This section does not apply to loss surrendered, or treated as carried
forward, under section 1217SC (terminal losses).

1217SC Terminal losses

(1) This section applies if—

(a) the company ceases to carry on the separate orchestral trade,
30and

(b) if the company had not ceased to carry on that 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”).

35Below in this section the company is referred to as “company A” and
the separate orchestral trade is referred to as “trade 1”.

(2) If company A—

(a) is treated under section 1217Q(2) or (5) as carrying on a
separate trade in relation to the production of another concert
40or concert series (“trade 2”), and

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

company A 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
45were 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
1217Q(2) or (5) as carrying on a separate trade (“company B’s
trade”) in relation to the production of another concert or
5concert series,

(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) 10Company A may surrender the loss (or a 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
15so 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
20to 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).

CHAPTER 5 Provisional entitlement to relief

1217T Provisional entitlement to relief

(1) 25In relation to a company and the production of a concert or concert
series, “interim accounting period” means any accounting period
that—

(a) is one in which the company carries on a separate orchestral
trade, and

(b) 30precedes the accounting period in which it ceases to do so.

(2) A company is not entitled to orchestra tax relief for an interim
accounting period unless—

(a) its company tax return for the period states the amount of
planned core expenditure on the production of the concert or
35concert series that is EEA expenditure (see section
1217RB(2)), and

(b) that amount is such as to indicate that the EEA expenditure
condition (see section 1217RB) will be met in relation to the
production.

40If those requirements are met, the company is provisionally treated
in relation to that period as if the EEA expenditure condition were
met.

1217TA Clawback of provisional relief

(1) If a statement is made under section 1217T(2) but it subsequently
appears that the EEA expenditure condition will not be met on the
company’s ceasing to carry on the separate orchestral trade, the
5company—

(a) is not entitled to orchestra tax relief for any period for which
its entitlement depended on such a statement, and

(b) must amend accordingly its company tax return for any such
period.

(2) 10When a company ceases to carry on the separate orchestral 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
orchestral trade, and

(b) 15be accompanied by a final statement of the amount of the core
expenditure on the production of the concert or concert series
that is EEA expenditure.

(3) If that statement shows that the EEA expenditure condition is not
met—

(a) 20the company is not entitled to orchestra tax relief or to relief
under section 1217SC (transfer of terminal losses) for any
period, and

(b) must amend accordingly its company tax return for any
period for which such relief was claimed.

(4) 25Any 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.

CHAPTER 6 Interpretation

1217U Interpretation

30In this Part—

• “company tax return” has the same meaning as in Schedule 18
  to FA 1998 (see paragraph 3(1) of that Schedule);

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

• “costs”, in relation to a concert or concert series, has the
  35meaning given by section 1217QD;

• “EEA expenditure” has the meaning given by section
  1217RB(2);

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

• 40“income”, in relation to a concert or concert series, has the
  meaning given by section 1217QC;

• “orchestra tax relief” is to be read in accordance with Chapter 3
  (see in particular section 1217R(1));

• “orchestral concert” has the meaning given by section 1217PA;

Finance (No. 2) BillPage 323

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

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

• 5“qualifying orchestral concert” has the meaning given by
  section 1217RA(3);

• “qualifying orchestral concert series” has the meaning given by
  section 1217RA(5);

• the “separate orchestral trade” is to be read in accordance with
  10section 1217Q.”

Part 2 Consequential amendments

ICTA

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

(2) 15In subsection (1), after paragraph (fc) insert—

“(fd) a payment of orchestra tax credit falls to be made to a
company; or”.

(3) In subsection (3C), for “or theatre tax credit” substitute “, theatre tax credit
or orchestra tax credit”.

(4) 20In subsection (8A)—

(a) in paragraph (a), for “or (fc)” substitute “, (fc) or (fd)”, and

(b) in paragraph (b)(ii), after “theatre tax credit” insert “or orchestra tax
credit”.

(5) In subsection (8BA), after “theatre tax credit” (in both places) insert “or
25orchestra tax credit”.

FA 1998

3 Schedule 18 to FA 1998 (company tax returns, assessments and related
matters) is amended as follows.

4 In paragraph 10 (other claims and elections to be included in return), in sub-
30paragraph (4), for “or 15C” substitute “, 15C or 15D”.

5 (1) Paragraph 52 (recovery of excessive repayments etc) is amended as follows.

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

“(bh) orchestra tax credit under Part 15D of that Act,”.

(3) In sub-paragraph (5)—

(a) 35after paragraph (ai) insert—

“(aj) an amount of orchestra tax credit paid to a
company for an accounting period,”, and”

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

6 In Part 9D (certain claims for tax relief)—

(a) 40in the heading, for “or 15C” substitute “, 15C or 15D”, and

(b) in paragraph 83S (introduction), after sub-paragraph (e) insert—

“(f) orchestra tax relief.”

CAA 2001

7 In Schedule A1 to CAA 2001 (first-year tax credits), in paragraph 11(4), omit
5the “and” at the end of paragraph (e) and after paragraph (f) insert “, and

(g) Chapter 3 of Part 15D of that Act (orchestra 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 paragraph
10(ivc) and after that paragraph insert—

“(ivd) an orchestra tax credit under Chapter 3 of Part 15D of that
Act, or”.

CTA 2009

9 In Part 8 of CTA 2009 (intangible fixed assets), in Chapter 10 (excluded
15assets), after section 808C insert—

“808D Assets representing expenditure incurred in course of separate
orchestral trade

(1) This Part does not apply to an intangible fixed asset held by an
orchestral concert production company so far as the asset represents
20expenditure on an orchestral concert or orchestral concert series that
is treated under Part 15D as expenditure of a separate trade (see
particularly sections 1217Q and 1217QF).

(2) In this section—

• “orchestral concert” has the same meaning as in Part 15D (see
  25section 1217PA);

• “orchestral concert production company” means a company
  which, for the purposes of that Part, is the production
  company in relation to a concert (see section 1217PB).”

10 In section 1310 of CTA 2009 (orders and regulations), in subsection (4), after
30paragraph (em) insert—

“(en) section 1217RB (EEA expenditure condition),

(eo) section 1217RE (amount of additional deduction),”.

11 In Schedule 4 to CTA 2009 (index of defined expressions), insert at the
appropriate places—

FA 2009

12 In Schedule 54A to FA 2009 (which is prospectively inserted by F(No. 3)A
2010 and contains provision about the recovery of certain amounts of
interest paid by HMRC), in paragraph 2—

(a) 15in sub-paragraph (2), omit the “or” at the end of paragraph (g) and
after paragraph (h) insert “, or

(i) a payment of orchestra tax credit under Chapter 3
of Part 15D of CTA 2009 for an accounting period.”;

(b) in sub-paragraph (4), for “(h)” substitute “(i)”.

20CTA 2010

13 In Part 8B of CTA 2010 (trading profits taxable at Northern Ireland rate), in
section 357H(7) (introduction), after “Chapter 14 for provision about
theatrical productions;” insert “Chapter 14A for provision about orchestra
tax relief;”.

14 25In Part 8B of CTA 2010, after section 357UI insert—

““CHAPTER 14A Orchestra tax relief

Introductory

357UJ Introduction and interpretation

(1) This Chapter makes provision about the operation of Part 15D of
30CTA 2009 (orchestra tax relief) 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
35in 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 orchestral trade” has the same meaning as in
Part 15D of CTA 2009 (see section 1217Q(6) of that Act);

(c) 5“qualifying expenditure” has the same meaning as in Chapter
3 of that Part (see section 1217RF of that Act).

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

Orchestra tax relief

357UK 10 Northern Ireland additional deduction

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

(2) 15A Northern Ireland additional deduction forms part of the Northern
Ireland profits or Northern Ireland losses of the separate orchestral
trade.

357UL Northern Ireland supplementary deduction

(1) This section applies where—

(a) 20a company is entitled under section 1217RD of CTA 2009 to
an additional deduction in calculating the profit or loss of the
separate orchestral 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
25Ireland additional 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
30accounting period, but does not make a claim under
section 1217RG of CTA 2009 (orchestra tax credit
claimable if company has surrenderable loss) for the
period;

(iii) the company has a surrenderable loss in the
35accounting 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) The company is entitled to make another deduction (“a Northern
40Ireland supplementary deduction”) in respect of qualifying
expenditure.

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

(4) The Northern Ireland supplementary deduction—

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

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

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

357UM 5 Northern Ireland supplementary deduction: amount

(1) This section contains provision for the purposes of section 357UL(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 1217RG 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
20amount of the Northern Ireland supplementary deduction is
determined by taking the following steps.

• Step 1

• Calculate, for each financial year, the amount that would be the
  Northern Ireland supplementary deduction for the
  25accounting period if it fell within only that financial year (see
  subsection (2)).

• Step 2

• Multiply each amount calculated under step 1 by the proportion
  of the accounting period that falls within the financial year
  30for which it is calculated.

• Step 3

• Add together each amount found under step 2.

357UN Orchestra tax credit: Northern Ireland supplementary deduction
ignored

35For the purpose of determining the available loss of a company
under section 1217RH of CTA 2009 (amount of surrenderable loss)
for any accounting period, any Northern Ireland supplementary
deduction made by the company in the period (and any Northern
Ireland supplementary deduction made in any previous accounting
40period) is to be ignored.

Losses of separate orchestral trade

357UO Restriction on use of losses before completion period

(1) Section 1217SA of CTA 2009 (restriction on use of losses before
completion period) has effect subject as follows.

(2) 5The reference in subsection (1) of that section to a loss made in the
separate orchestral trade in an accounting period preceding the
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) 10any mainstream losses of the trade of the period;

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 an
accounting period preceding the completion period—

(a) 15both 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
20losses against 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) 25in 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 “the completion period” has the same meaning as in
section 1217SA of CTA 2009 (see section 1217S(2) of that Act).

357UP Use of losses in the completion period

(1) 30Section 1217SB of CTA 2009 (use of losses in the completion period)
has effect subject as follows.

(2) The reference in subsection (1) of that section to a loss made in the
separate orchestral trade is, in relation to a loss made in a period in
which the company is a Northern Ireland company, a reference to—

(a) 35any 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 (2) and (4) of that section are
to be read accordingly.

(3) The references in subsection (3) of that section to a loss made in the
40separate orchestral trade in the completion period are, where the
company is a Northern Ireland company in the period, references
to—

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

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

45and references to losses in subsection (4) of that section are to be read
accordingly.

(4) Subsection (4) of that section has effect, in relation to Northern
Ireland losses, as if the reference to an additional deduction under
Chapter 3 of Part 15D of CTA 2009 included a reference to a Northern
Ireland supplementary deduction under this Chapter.

357UQ 5 Terminal losses

(1) Section 1217SC of CTA 2009 (terminal losses) has effect subject as
follows.

(2) Where—

(a) a company makes an election under subsection (3) of that
10section (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,

that subsection has effect as if the reference in it to a loss brought
15forward 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 company) in relation to part or all of a terminal loss,
20and

(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.”

15 (1) Schedule 4 to CTA 2010 (index of defined expressions) is amended as
25follows.

(2) In the entry for “Northern Ireland expenditure”—

(a) for “14” substitute “14A”, and

(b) for “and 357U(2)” substitute “, 357U(2) and 357UJ(2)”.

(3) Insert at the appropriate places—

Part 3 35Commencement

16 Any power to make regulations conferred on the Treasury by virtue of this
Schedule comes into force on the day on which this Act is passed.

17 (1) The amendments made by the following provisions of this Schedule have
effect in relation to accounting periods beginning on or after 1 April 2016—

(a) 40Part 1, and

(b) in Part 2, paragraphs 2 to 12.