Introduction Schedule 16 Part 1: Amendments of CTA 2009 Chapter 3: Television Tax Relief
55.New sections 1216C(1) to (7) provide that for a relief to be available a relevant programme must satisfy a number of criteria and also set out how relief will be given and the procedure for making claims. The criteria include:
	Being intended for broadcast;
	Being a British programme as required by new section 1216CB; and,
	Having the required level of core expenditure as required by new section 1216CE
56.New section 1216C (4) provides that where relief has already been given for R&D on the same expenditure then relief is not available for animation or high-end television. This is to prevent double claims on the same expenditure.
57.New section 1216CA (1) provides that a relevant programme must be intended for broadcast to the general public.
58.New section 1216CA (2) provides that the question of whether this condition is met is to be determined when the television production activities begin. And also provides for circumstances where a programme starts out being intended for broadcast even if subsequently the intention changes. However, where the original intention is not to broadcast the programme to the general public the condition will not be met.
59.New section 1216CB sets out the certification process for relevant programmes other than qualifying co-productions (see 1216AI for the meaning of ‘qualifying co-production’ and ‘co-producer’).
60.New sections 1216CB(1) provides that a television production company must apply to the Secretary of State for a relevant programme to be certified as British and that certain conditions must be met in a ‘cultural test’.
61.New section 1216CB (2) to (5) provide further details on the operation of the regulations.
62.New section 1216CB (6) provides that further details on certification of programmes is contained at new sections 1216CC and 1216CD.
63.New sections 1216CC(1) to (2) provide that applications for certification of the relevant television programme as British are to be made to the Secretary of State and that the application may be for an interim or final certificate.
64.New sections 1216CC (3) and (4) define what is meant by an ‘interim’ certificate and a ‘final’ certificate’.
65.New sections 1216CC(5) to (6) provide that companies must provide the Secretary of State with all documents and information to determine an application and that the Secretary of State may require additional information provided for the purposes of the application and a declaration as to its truth.
66.New section 1216CC (7) to (9) provide that the Secretary of State may, by regulations, amend the application process, particulars required etc.
67.New section 1216CD (1) to (2) provide that the Secretary of State shall certify a relevant programme if he is satisfied that it meets the requirements for an interim or final certificate. However, if the Secretary of State is not so satisfied, he shall not certify the relevant programme.
68.New sections 1216CD (3) and (4) allows an interim certificate to be given subject to certain conditions, and provides that the certificate may, if the Secretary of State wishes, be given an expiry date. In any case an interim certificate expires when a corresponding final certificate is issued.
69.New sections 1216CD (5) and (6) provide that the Secretary of State shall revoke a certificate if it becomes clear that it should not have been issued. A revoked certificate is treated as never having been issued (unless the Secretary of State provides otherwise).
70.New sections 1216CE (1) to (2) impose another condition for relief; that not less that 25 per cent of the core production expenditure on the relevant programme must be UK expenditure. HM Treasury may vary this minimum percentage of UK expenditure by regulations.
71.New sections 1216CF(1) and (2) provide that the company may claim an additional deduction, based on its qualifying expenditure on the relevant programme to be taken into account in calculating its profit or loss from its separate programme trade. The additional deduction and the payable tax credit together make up the new tax relief.
72.New section 1216CF (3) defines ‘qualifying expenditure’ for this purpose.
73.New section 1216CF (4) allows HM Treasury, by regulation, to amend subsection (3) and to provide that particular sorts of expenditure are or are not qualifying expenditure.
74.New section 1216CG (1) applies for the first period of account in which the trade of producing the relevant programme is carried out. For this period, the additional deduction is given by E where E is the lesser of the amount of qualifying expenditure which is UK expenditure or 80 per cent of that amount.
75.New section 1216CG (2) applies in the subsequent periods of account. In such periods the additional deduction is E– P where E is now either the lesser of the amount of qualifying expenditure to date (i.e. the sum for the current period and all subsequent periods) which is UK expenditure and 80 per cent of that amount. P is the total amount of additional deduction for all previous periods.
76.New section 1216CG (3) allows HM Treasury to amend section 1216CG by regulations.
77.New section 1216CH(1) provides that a television production company (as defined in new section 1216AE) may claim a television tax credit in an accounting period for which it has a surrenderable loss.
78.New section 1216CH (2) defines the surrenderable loss. This is the lesser of the trading loss and the available qualifying expenditure.
79.New section 1216CH (3) calculates the available loss for an accounting period as L plus RUL where L is the amount of the company’s loss for the period and RUL is the amount of any relevant unused loss. RUL is defined further in new section 1216CH (4).
80.New section 1216CH (4) defines “relevant unused loss” of a company as that part of a loss neither surrendered for tax credit nor carried forward under section 45 of the Corporation Tax Act 2010.
81.New section 1216CH (5) defines the available qualifying expenditure for the first period of account during which the trade is carried on as the amount E defined in 1216CG (1).
82.New section 1216CH(6) defines the available qualifying expenditure for subsequent periods as E minus S, where E is the amount defined in new section 1216CG(2) and S is the aggregate of the amounts surrendered for television tax credit in previous periods as defined by new section 1216CI(1).
83.New section 1216CH (7) provides for any necessary apportionments where a period of account of the separate programme trade does not coincide with an accounting period.
84.New section 1216CI (1) provides that a company may surrender all or part of its surrenderable loss for a period.
85.New section 1216CI (2) sets the payable tax credit rate as 25%.
86.New section 1216CI (3) provides that where part of the loss is surrendered a company’s available loss will be reduced by the surrendered amount.
87.New section 1216CJ(1) provides that where a company is entitled to a television tax credit for a period, and it claims that credit, the Commissioners for Her Majesty’s Revenue and Customs will pay the credit to the company.
88.New section 1216CJ(2) provides that an amount of credit that is payable, or an amount of interest payable under section 826 Income and Corporation Taxes Act 1988, may be set against any corporation tax that the company owes, and that if it is so set, the Commissioners’ obligation under new section 1216CJ(1) is met.
89.New section 1216CJ (3) overrules new section 1216CJ (1) when the company’s tax return is enquired into by HM Revenue and Customs, so that no payment need then be made to the company. HM Revenue and Customs may however make such provisional payments as it deems fit.
90.New section 1216CJ(4) overrules new section 1216CJ(1) so that when the company owes HM Revenue and Customs any amount of PAYE, Class 1 National Insurance contributions or any amount due, no payment need to be made to the company.
91.New section 1216CJ (5) provides that a payment of a television tax credit is not income for the company for any tax purpose.
92.New section 1216CK (1) provides that no amount is to be included in costs for a period if it is still unpaid four months after the period ends.
93.New section 1216CK (2) provides that new section 1216CK (1) does not override the normal operation of new section 1216BD (when costs are taken to be incurred).
94.New section 1216CL is a general anti avoidance provision, which denies television production tax relief to the extent that it arises from artificially inflated claims.
95.New section 1216CL(1) sets out that where a transaction is attributable to arrangements entered into (wholly or partly) for a disqualifying purpose, that transaction is disregarded in determining the amount of additional deduction or television tax credit due.
96.New section 1216CL (2) sets out when arrangements are entered into for a disqualifying purpose. This is when their main object, or one of their main objects, is to enable a company to obtain an additional deduction or a television tax credit that it would not otherwise be entitled to, or a larger deduction or greater amount of television tax credit than it would otherwise be entitled to.
97.New section 1216CL (3) defines “arrangements”.
98.New sections 1216CM (1) to (4) allow HM Revenue and Customs to disclose information to the Secretary of State for the purposes of his functions and also allows for the same information to be disclosed to the British Film Institute.
99.New section 1216CM (5) imposes a duty of confidentiality on any person to whom the information is disclosed under new sections 1216CM (1) and (3).
100.New section 1216CN (1) provides that a person commits an offence if he discloses information about an identifiable person in contravention of new section 1216CM.
101.New section 1216CN (2) provides a defence for a person charged with such an offence that he believed the disclosure to be lawful, or the information had already lawfully been made public.
102.New sections 1216CN (3) and (6) sets out the penalties for a person convicted of wrongful disclosure.
103.New section 1216CN (4) provides that a prosecution may only be brought in England and Wales by the Director of Revenue and Customs Prosecution or with the consent of the Director of Public Prosecutions.
104.New section 1216CN(5) provides that a prosecution may only be brought in Northern Ireland by the Commissioners for HM Revenue and Customs or with the consent of the Director of Public Prosecutions for Northern Ireland.