Corporation Tax Act 2009 section 1179DR

Expenditure that qualifies for credit

Section 1179DR defines which production expenditure qualifies as "relevant production expenditure" for the purposes of calculating a film or television programme's expenditure credit, and imposes a cap for certified low-budget films.

• To qualify, expenditure must be "core expenditure" relating to the film or television programme — broadly, costs directly involved in producing the content.
• Expenditure is disqualified if it falls within the excluded categories, such as research and development costs or amounts arising from non-arm's length transactions with connected parties.
• For certified low-budget films, a maximum of £15 million of the production company's relevant global expenditure can count towards the expenditure credit calculation.
• Where the £15 million cap applies, UK expenditure is counted first before any overseas expenditure, ensuring that UK spending takes priority in reaching the cap.