FPC55020 - Film Tax Relief: Calculation: Maximum amount of core expenditure subject to claim

FA06/SCH5/PARA2 & PARA4

The amount of Film Tax Relief (FTR) is based on the UK core expenditure, up to a maximum of 80% of the total core expenditure incurred by the film production company (FPC).

An FPC can claim FTR on the lower of either:

• 80% of total core expenditure; or
• the actual UK core expenditure incurred.

UK core expenditure is the amount of core expenditure ( FPC50010) incurred by the film production company which is also UK expenditure ( FPC50050).

In this guidance the amount on which the FPC is entitled to claim FTR is termed enhanceable expenditure.

Example 1: Core expenditure all UK

An FPC incurs £2m of core expenditure on a film, all of it in the UK.

Actual UK core expenditure > 80% of total core expenditure.

FPC can claim FTR on 80% x total core expenditure (£2m) = £1.6m.

Example 2: Core expenditure part-UK, part non-UK

An FPC incurs £4m of core expenditure on a film, of which £2.5m is UK expenditure. The remainder is incurred in France.

Actual UK core expenditure < 80% of total core expenditure.

FPC can claim FTR on actual UK core expenditure (£2.5m).

Example 3: Co-production

A UK company incurs £5m of core expenditure on a film. Its co-producer incurs a further £500,000 of core expenditure on the film.

Actual UK core expenditure > 80% of total core expenditure.

FPC can claim FTR on 80% x total core expenditure (£5m) = £4m.

Even though combined core expenditure on the film (by both co-producers) was £5.5m, the limit is 80% of the total core expenditure incurred by the FPC.