FPC55030 - Calculation: rates of relief
CTA2009/S1200 & 1202
Where a film production company (FPC) is entitled to claim Film Tax Relief (FTR) in respect of enhanceable expenditure (FPC55020) the rates of both the enhancement and any payable credit are determined by the level of total core expenditure incurred by the FPC.
Limited-budget films (one with total core expenditure of £20m or less: FPC10160) enjoy higher rates than others (those whose core expenditure is over £20m).
| Limited-budget films | Other films | |
| Rate of enhancement | 100% | 80% |
| Payable credit rate | 25% | 20% |
FTR will be most valuable where the film is profitable and the FPC uses the additional deduction against income. The table below shows the value of the FTR assuming in each case that:
- at least 80% of the total core expenditure is UK core expenditure and
- the rate of corporation tax is 28%.
| Limited-budget film | Other films | |
| FPC with sufficient taxable profits to absorb all of additional deduction | Enhanceable expenditure = 80% of total expenditureRate of enhancement = 100% Value of FTR: = 80% x 100% x 28%= 22.4% | Enhanceable expenditure = 80% of total expenditureRate of enhancement = 80% Value of FTR: = 80% x 80% x 28%= 17.9% |
| FPC has no taxable profits and claims maximum amount of payable credit | Enhanceable expenditure = 80% of total expenditureRate of enhancement = 100% Payable credit rate = 25%Value of FTR: = 80% x 100% x 25%= 20% | Enhanceable expenditure = 80% of total expenditureRate of enhancement = 100% Payable credit rate = 20%Value of FTR: = 80% x 100% x 20%= 16% |
