Pre-Budget Report – Film Tax Relief
HMRC have announced that they are correcting a ‘quirk’ in the legislation that restricts film tax relief in an unintended way for films which have some overseas production expenditure. The new legislation which will be introduced in Finance Bill 2010 will be effective for accounting periods ending on or after 9 December 2009 and will be treated for those periods as always having had effect.
The quirk relates to an unintended anomaly affecting the amount of tax credit claimable where films are produced over more than one accounting period and where there is an increased UK spend in the second or later periods.
The proposed change to the legislation will adjust the way the amount surrenderable for tax credit is calculated.
The calculation will become the lesser of:
- The available qualifying expenditure and
- The loss for the period, plus any unsurrendered loss brought forward.