sc1611805.247-253

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

S.C.A.
247

House of Commons

Thursday 18th May 2006

Standing Committee Proceedings

Standing Committee A

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)

[SEVENTH and EIGHTH Sittings]

Clause 32

Withdrawn

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 be made.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  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

Negatived on division  31

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

S.C.A.    Standing Committee Proceedings: 18th May 2006
248

Finance (N, continued

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  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

Not called  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

Not called  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

Not called  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)’.

Clause Agreed to.

Clause 33 Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  34

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

S.C.A.    Standing Committee Proceedings: 18th May 2006
249

Finance (N, continued

Clause Agreed to.

Dawn Primarolo

Agreed to  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

Not called  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.’.

Clause, as amended, agreed to.

Clauses 36 and 37 Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Withdrawn  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

Not called  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.’.

S.C.A.    Standing Committee Proceedings: 18th May 2006
250

Finance (N, continued

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  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

Not called  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

Not called  41

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

Schedule Agreed to.

Clause 38 Agreed to.

Dawn Primarolo

Agreed to  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.’.

S.C.A.    Standing Committee Proceedings: 18th May 2006
251

Finance (N, continued

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  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’.

Clause, as amended, Agreed to.

Clause 40 Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  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’.

Clause Agreed to.

Clause 42 Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Withdrawn  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

Agreed to  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’.

Schedule, as amended, Agreed to.

S.C.A.    Standing Committee Proceedings: 18th May 2006
252

Finance (N, continued

Clauses 43 and 44 Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Withdrawn  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

Not called  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

Not called  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

Not called  39

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

Clause Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not moved  48

Clause  46,  page  34,  line  13  [Vol I],  after ‘film’ insert ‘by a film production

company’.

S.C.A.    Standing Committee Proceedings: 18th May 2006
253

Finance (N, continued

Clause Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  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

Not called  50

Clause  47,  page  35,  line  2  [Vol I],  after ‘film’ insert ‘by a film production

company’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  51

Clause  47,  page  35,  line  4  [Vol I],  after ‘film’ insert ‘by a film production

company’.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Not called  52

Clause  47,  page  35,  line  7  [Vol I],  after ‘incurred’ insert ‘by a film production

company’.

Clause Agreed to.

Clauses 48 to 53 Agreed to.

Mrs Theresa Villiers

Mr Mark Francois

Mr Mark Hoban

Mr Paul Goodman

Andrew Selous

Withdrawn  77

Clause  54,  page  38,  line  34  [Vol  I],  at end insert ‘at a rate that is less than an