Corporation Tax Act 2009 section 1179CB

Expenditure credit to count as taxable receipt

Section 1179CB explains how an audio-visual expenditure credit interacts with the calculation of profits for the separate production trade, ensuring it is treated as a taxable receipt.

• An expenditure credit is not treated as income when initially calculating the profits of the separate production trade.
• If a company is entitled to and claims an expenditure credit for an accounting period, the profits must be adjusted afterwards.
• The adjustment is made by adding the expenditure credit as a credit to the already-calculated profits of the separate production trade.
• This two-step approach ensures the credit is taxable but does not distort the initial profit calculation.