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S.C.A.

Amendment Paper as at
Thursday 18th May 2006

STANDING COMMITTEE A


New Amendments handed in are marked thus *

FINANCE (NO. 2) BILL

(except Clauses 13 to 15, 26, 61, 91 and 106, Schedule 14, and new Clauses relating to the effect of provisions of the Bill on section 18 of the Inheritance Tax Act 1984)

NOTE

The amendments have been arranged in accordance with the Order of the Committee [9th May]

Clause 32

Another Amendment (No. 47) proposed, in page 29, line 14 [Vol I], at the end to insert the words '; but notwithstanding the provisions of this section, a company is only a "film production company" if it meets the conditions for film tax relief as set out in section 38 of this Act.'.—(Mrs Theresa Villiers)

Question proposed, That the Amendment must be made.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

64

Clause     32,     page     29,     line     17     [Vol I],     leave out lines 17 to 20 and insert—

'(a) undertakes (whether on its own account or whether it is responsible to a third party)—

(i) principal photography and post production of the film, and

(ii) delivery of the completed film,'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

31

Clause     32,     page     29,     line     18     [Vol I],     leave out 'pre-production'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

65

Clause     32,     page     29,     line     22     [Vol I],     leave out 'pre-production,'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

32

Clause     32,     page     29     [Vol I],     leave out lines 24 and 25.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

33

Clause     32,     page     29,     line     26     [Vol I],     at end insert—

    '(3A)   The Treasury may, by regulations—

(a) amend subsection (3); and

(b) provide that specified activities are or are not to be regarded for the purposes of this Chapter as film making activities;

and in this subsection "specified" means specified in the regulations.'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

46

Clause     32,     page     29,     line     27     [Vol I],     after 'company', insert 'resident in the United Kingdom (and not resident in another place in accordance with the law of that place relating to taxation)'.


   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

34

Clause     34,     page     30,     line     19     [Vol I],     after 'on', insert 'development,'.


   

Dawn Primarolo

26

Clause     35,     page     30,     line     36 [Vol 1],     leave out from beginning to end of line 37 and insert 'goods or services that are used or consumed in the United Kingdom'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

35

Clause     35,     page     30,     line     37     [Vol I],     at end insert—

        'But for the purposes of this subsection—

(a) services provided in relation to rented equipment shall be considered to have been performed in the United Kingdom where the equipment is used in the United Kingdom; and

(b) where goods are initially supplied in the United Kingdom, their subsequent transport and use outside the United Kingdom shall not prevent the relevant expenditure from being treated as UK expenditure.'.


   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

40

Schedule     4,     page     165     [Vol I],     leave out lines 15 to 17.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

42

Schedule     4,     page     165,     line     26     [Vol I],     at end insert—

'(1A) Where a company incurs expenditure on the development of a film that is abandoned before pre-production and subsequently begins to carry on a trade as a film production company in relation to another film, the expenditure may be treated as expenditure of the trade of the second film and as if incurred immediately after the company began to carry it on. Provided that the same expenditure is not to be given more than once.'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

53

Schedule     4,     page     166,     line     19     [Vol I],     leave out paragraphs 7, 8 and 9 and insert—

'7  For the purposes of this Schedule profits and losses are calculated in accordance with generally-accepted United Kingdom accounting principles.'.

   

Mr David Gauke

55

Schedule     4,     page     167,     line     4     [Vol I],     at end insert '; and accordingly—

(a)   where, within six years of the end of the first period of account, it becomes clear that the original estimates were incorrect, the film production company can elect in writing to amend the original tax computations to reflect the correct position;

(b)   income taxed under the provisions of paragraph 7 of this Schedule shall not be taken into account for tax purposes in a subsequent period of account.'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

41

Schedule     4,     page     167     [Vol I],     leave out lines 6 to 17.


   

Dawn Primarolo

27

Clause     39,     page     31,     line     28 [Vol 1],     leave out subsection (3) and insert—

    '(3)   Whether this condition is met is determined for each accounting period of the film production company during which film-making activities are carried on in relation to the film, in accordance with the following rules.

    (4)   If at the end of an accounting period the film is intended for theatrical release, the condition is treated as having been met throughout that period (subject to subsection (5)(b)).

    (5)   If at the end of an accounting period the film is not intended for theatrical release, the condition—

(a) is treated as having been not met throughout that period, and

(b) cannot be met in any subsequent accounting period.

This does not affect any entitlement of the company to relief in an earlier accounting period for which the condition was met.'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

43

Clause     39,     page     31,     line     28     [Vol I],     leave out subsection (3) and insert—

    '(3)   Whether this condition is met may be determined at any time after film making activities begin, so long as the film is intended for theatrical release prior to delivery of the completed film'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

44

Clause     41,     page     32,     line     4     [Vol I],     at end insert 'and expenditure incurred by a person which is reimbursed by a film production company shall be deemed to be expenditure by the film production company for the purposes of this section where it would have fallen within this section had it been incurred directly by the film production company'.


   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

54

Schedule     5,     page     170,     line     5     [Vol I],     after 'pay' insert 'within 90 days of the claim being made, subject to sub-paragraphs (3) and (4) below,'.

   

Dawn Primarolo

24

Schedule     5,     page     173,     line     33     [Vol I],     leave out 'that Chapter' and insert 'Chapter 3 of Part 3 of the Finance Act 2006'.


   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

36

Clause     45,     page     33,     line     21     [Vol I],     leave out 'qualifying'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

37

Clause     45,     page     33,     line     26     [Vol I],     leave out 'qualifying'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

38

Clause     45,     page     33,     line     32     [Vol I],     leave out first 'qualifying'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

39

Clause     45,     page     34,     line     6     [Vol I],     leave out from 'Schedule 4' to end of line 8.


   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

48

Clause     46,     page     34,     line     13     [Vol I],     after 'film' insert 'by a film production company'.


   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

49

Clause     47,     page     34,     line     42     [Vol I],     after 'film' insert 'by a film production company'.

   

Mrs Theresa Villiers
Mr Mark Francois
Mr Mark Hoban
Mr Paul Goodman
Andrew Selous

50

Clause     47,     page     35,     line     2     [Vol I],     after 'film' insert 'by a film production company'.

 
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Prepared 18 May 2006