Finance Bill (HC Bill 47)

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(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
5concert 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.

10If 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
15appears that the EEA expenditure condition will not be met on the
company’s ceasing to carry on the separate orchestral trade, the
company—

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

(b) 20must amend accordingly its company tax return for any such
period.

(2) When 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) 25state that the company has ceased to carry on the separate
orchestral trade, and

(b) be 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) 30If that statement shows that the EEA expenditure condition is not
met—

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

(b) 35must amend accordingly its company tax return for any
period for which such relief was claimed.

(4) 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.

CHAPTER 6 40Interpretation
1217U Interpretation

In this Part—

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

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

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

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

  • 5EEA expenditure condition” has the meaning given by section
    1217RB;

  • “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
    10(see in particular section 1217R(1));

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

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

  • “qualifying expenditure” has the meaning given by section
    151217RF;

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

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

  • 20the “separate orchestral trade” is to be read in accordance with
    section 1217Q.”

Part 2 Consequential amendments

ICTA

2 (1) 25Section 826 of ICTA (interest on tax overpaid) is amended as follows.

(2) In 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
30or orchestra tax credit”.

(4) In 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) 35In subsection (8BA), after “theatre tax credit” (in both places) insert “or
orchestra tax credit”.

FA 1998

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

4 40In paragraph 10 (other claims and elections to be included in return), in sub-
paragraph (4), for “or 15C” substitute “, 15C or 15D”.

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

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(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) after paragraph (ai) insert—

(aj) 5an 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) in the heading, for “or 15C” substitute “, 15C or 15D”, and

(b) 10in 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
the “and” at the end of paragraph (e) and after paragraph (f) insert , and

(g) 15Chapter 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
(ivc) and after that paragraph insert—

(ivd) 20an 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
assets), after section 808C insert—

808D 25 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
expenditure on an orchestral concert or orchestral concert series that
30is 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
    section 1217PA);

  • 35“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
paragraph (em) insert—

(en) 40section 1217RB (EEA expenditure condition),

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

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

“company tax return (in Part 15D) section 1217U”
“core expenditure (in Part 15D) section 1217RC”
“costs, in relation to a concert or concert series (in
Part 15D)
5section 1217QD”
EEA expenditure (in Part 15D) section 1217RB(2)”
EEA expenditure condition (in Part 15D) section 1217RB”
“income, in relation to a concert or concert series (in
Part 15D)
section 1217QC”
10
“orchestra tax relief (in Part 15D) section 1217R(1)”
“orchestral concert (in Part 15D) section 1217PA”
“production company (in Part 15D) section 1217PB”
“qualifying expenditure (in Part 15D) section 1217RF”
“qualifying orchestral concert (in Part 15D) 15section 1217RA(3)”
“qualifying orchestral concert series (in Part 15D) section 1217RA(5)”
“separate orchestral trade (in Part 15D) section 1217Q”.

FA 2009

12 In Schedule 54A to FA 2009 (which is prospectively inserted by F(No. 3)A
202010 and contains provision about the recovery of certain amounts of
interest paid by HMRC), in paragraph 2—

(a) in 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
25of Part 15D of CTA 2009 for an accounting period.”;

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

CTA 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
30theatrical productions;” insert “Chapter 14A for provision about orchestra
tax relief;”.

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

“CHAPTER 14A Orchestra tax relief
Introductory
357UJ Introduction and interpretation

(1) 5This Chapter makes provision about the operation of Part 15D of
CTA 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) 10“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 orchestral trade” has the same meaning as in
15Part 15D of CTA 2009 (see section 1217Q(6) of that Act);

(c) “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.

20Orchestra tax relief
357UK 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
25expenditure 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 orchestral
trade.

357UL Northern Ireland supplementary deduction

(1) 30This section applies where—

(a) a 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) 35the 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
accounting period;

(ii) 40the company has a surrenderable loss in the
accounting period, but does not make a claim under
section 1217RG of CTA 2009 (orchestra tax credit

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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
5section 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
Ireland supplementary deduction”) in respect of qualifying
10expenditure.

(3) See section 357UM 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
15orchestral 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 20 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—


25

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
    30claim 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
35amount 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
    40accounting 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
    45for which it is calculated.

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  • Step 3

  • Add together each amount found under step 2.

357UN Orchestra tax credit: Northern Ireland supplementary deduction
ignored

5For 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
10period) 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) 15The 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) 20any 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) 25both 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
30losses 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) 35in 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) 40Section 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—

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

(3) 5The references in subsection (3) of that section to a loss made in the
separate 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) 10any mainstream losses of the trade of the period;

and 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
15Chapter 3 of Part 15D of CTA 2009 included a reference to a Northern
Ireland supplementary deduction under this Chapter.

357UQ Terminal losses

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

(2) 20Where—

(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) 25the 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) a company makes a claim under subsection (6) of that section
30(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
35forward were to a Northern Ireland loss brought forward.”

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

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

(a) for “14” substitute “14A”, and

(b) 40for “and 357U(2)” substitute “, 357U(2) and 357UJ(2)”.

(3) Insert at the appropriate places—

“qualifying expenditure (in Chapter 14A of Part
8B)
section 357UJ(2)”

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“the separate orchestral trade (in Chapter 14A of
Part 8B)
section 357UJ(2)”.

Part 3 Commencement

16 5Any 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) Part 1, and

(b) 10in Part 2, paragraphs 2 to 12.

(2) Sub-paragraph (3) applies where a company has an accounting period
beginning before 1 April 2016 and ending on or after that date (“the
straddling period”).

(3) For the purposes of Part 15D of CTA 2009—

(a) 15so much of the straddling period as falls before 1 April 2016, and so
much of that period as falls on or after that date, are separate
accounting periods, and

(b) any amounts brought into account for the purposes of calculating for
corporation tax purposes the profits of a trade for the straddling
20period are apportioned to the two separate accounting periods on
such basis as is just and reasonable.

18 (1) The amendments made by paragraphs 13 to 15 of this Schedule have effect
in relation to accounting periods beginning on or after the first day of the
financial year appointed by the Treasury by regulations under section 5(3)
25of the Corporation Tax (Northern Ireland) Act 2015 (“the commencement
day”).

(2) Sub-paragraph (3) applies where a company has an accounting period
beginning before the commencement day and ending on or after that day
(“the straddling period”).

(3) 30For the purposes of Chapter 14A of Part 8B of CTA 2010—

(a) so much of the straddling period as falls before the commencement
day, and so much of that period as falls on or after that day, are
separate accounting periods, and

(b) any amounts brought into account for the purposes of calculating for
35corporation tax purposes the profits of a trade for the straddling
period are apportioned to the two separate accounting periods on
such basis as is just and reasonable.

SCHEDULE 9 Section 63 Profits from the exploitation of patents etc: consequential

1 40CTA 2010 is amended in accordance with this Schedule.

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2 In section 357B (meaning of “qualifying company”), in subsection (3)(b)(ii),
for “section 357A” substitute “section 357A(1)”.

3 In the heading of Chapter 3 of Part 8A, after “profits” insert “: cases
mentioned in section 357A(7): no income from new IP”.

4 (1) 5Section 357C (relevant IP profits) is amended as follows.

(2) Before subsection (1) insert—

(A1) This section applies for the purposes of determining the relevant IP
profits of a trade of a company for an accounting period in a case
where—

(a) 10the accounting period began before 1 July 2021,

(b) the company is not a new entrant (see section 357A(11)), and

(c) none of the amounts of relevant IP income brought into
account as credits in calculating the profits of the trade for the
accounting period is properly attributable to a new
15qualifying IP right (see section 357BP).

But see also section 357D (alternative method of calculating relevant
IP profits in such a case).”

(3) In subsection (1)—

(a) in the words before Step 1, omit “of a trade of a company for an
20accounting period”,

(b) in Step 2, for “357CC and 357CD” substitute “357BH to 357BHC”,

(c) in Step 4, after “routine return figure” insert “in relation to the trade
for the accounting period”,

(d) in Step 5, for “elected” substitute “made an election under section
25357CL”, and

(e) in Step 6, after “marketing assets return figure” insert “in relation to
the trade for the accounting period”.

5 In section 357CA (total gross income of a trade), in subsection (2), for
“section 357CB” substitute “section 357BG”.

6 30Omit sections 357CB to 357CF.

7 (1) Section 357CG (adjustments in calculating profits of trade) is amended as
follows.

(2) In subsection (1) after “determining” insert “under section 357C”.

(3) In subsection (4), in the words after paragraph (b), for “section 357CB”
35substitute “section 357BG”.

(4) In subsection (6), in paragraph (a)(ii) of the definition of “relevant
accounting period”, for “section 357A” substitute “section 357A(1)”.

8 In section 357CI (routine return figure), in Step 1 in subsection (1), for
“sections 357CJ and 357CK” substitute “sections 357BJA and 357BJB”.

9 40Omit sections 357CJ and 357CK.

10 (1) Section 357CL (companies eligible to elect for small claims treatment) is
amended as follows.

(2) In subsection (1) for “elect” substitute “make an election under this section”.