FPC50130 - Film Tax Relief: Eligible Expenditure: Ineligible expenditure

CTA2009/S1199

To qualifying for Film Tax Relief (FTR), core expenditure must be of a kind that would be taken into account under FA06/SCH4 in calculating the profit/loss of the film production company’s (FPC’s) separate trade. It is not possible to give a comprehensive list of non-qualifying expenditure, but the following items merit comment.

Completion bond and other forms of insurance

Completion bonds are a form of insurance against the risk that a film may not be completed. Costs of the completion bond do not qualify for FTR. They are not incurred on film-making activities.

Other forms of insurance, more directly concerned with the film-making activity itself, may qualify. For example, the owner of a UK property used as a location may require that the property should be insured against possible damage sustained during or as a result of filming. The costs of such insurance would be allowable.

Development costs

See FPC50120 - these costs are not part of core expenditure.

Entertaining

Cost related to hospitality and entertainment are disallowable under normal rules - ICTA88/s577.

Publicity and promotion

Except for costs of the unit publicist, whose role is supporting and enabling production, not publicising the completed film) publicity and promotional costs do not qualify for FTR. They are not concerned with the making of the film.

Audit fees

These do not relate to film-making activities - they do not qualify for FTR.

Bank interest and charges

While interest itself is regarded as part of the costs of financing a film, and therefore not incurred on film-making activities, charges incurred by banks for facilities that are needed by the FPC to engage in film-making activities (e.g charges associated with the maintenance of a current account from which suppliers, cast and crew can be paid ) are part of the costs of film-making.