BIM56317 - Film and audio products: deductions for qualifying films: claims for relief

A claim is required in order to obtain relief under F2A92/S41 (‘Section 41’ - see BIM56320), F2A92/S42 (‘Section 42’ – see BIM56325) and F2A92/S42 as extended by F2A97/S48 (‘Section 48’ – see BIM56380). These sections do not apply for IT purposes for years of assessment 2005/06 onwards, but are replaced by equivalent rules in Chapter 9 of ITTOIA at Sections 136 to 142. Those sections do not require a claim – see BIM56318.

It should be noted that although Section 48 is often referred to as a separate relief, the claim is actually made under Section 42: Section 48 merely amends the maximum amount of relief that may be given in a relevant period under Section 42. Relevant period has the same meaning as in F2A92/S40B ( BIM56210).

A claim under Section 41 or Section 42 gives an entitlement to deduct expenditure under those sections in a relevant period. Unless a valid claim has been made for a relevant period, there is no such entitlement and the general rules specified in F2A92/S40B for deducting expenditure will apply ( BIM56215), unless, exceptionally, there has been an election for capital allowance treatment ( BIM56310).

Although claims for relief under Section 41 or Section 42 will normally be made in a tax return, in cases where a tax return has yet to be issued a claim can be made on a stand alone basis. A separate claim is required for each relevant period in which a deduction is sought.

The claim must be in writing and should:

• identify the film;
• identify the relevant period to which it relates;
• be accompanied by a copy of the certificate giving qualifying film status, or if the claim is under Section 41 and the film is not complete, be accompanied by sufficient evidence that the film would be a qualifying film were it completed (BIM56320);
• for a standalone claim made outside of a tax return, be signed, as the case may be, by:

It should be noted that the claim must be made by the person carrying on the trade or business of exploitation of the master versions of films. Where the trade or business is carried on in partnership, that ‘person’ will be the partnership. In particular the claim must be made for the entire partnership: individual partners cannot make separate claims under Section 41 or Section 42. For relevant periods ending before 6 April 2005 individuals and partnerships subject to IT still need to claim under Section 42, even though the claim may be made in a post-ITTOIA period.

The time limits for making a claim are:

• for the purposes of IT, on or before the first anniversary of the 31 January next following the year of assessment in which ends the relevant period, to which the claim relates;
• for the purposes of CT, not later than two years after the end of the relevant period to which the claim relates.

It is not necessary for a film to be certified in the relevant period to which the claim relates, but it must always be certified before a claim is made, and a copy of the certificate must accompany the claim. Provisional claims without a certificate should not be accepted.

Late claims should not be accepted. Where a claimant argues that there are exceptional circumstances for accepting a late claim, the claim should be referred to CT&VAT (Technical).