Corporation Tax Act 2009 section 1179CC

Redemption of value of expenditure credit

Section 1179CC sets out the step-by-step process by which a company redeems the value of an audio-visual expenditure credit it has claimed, starting with offsetting corporation tax liabilities and ending with a cash payment from HMRC.

• The expenditure credit is first applied against the company's corporation tax liability for the same accounting period, then reduced by a notional tax amount calculated at the main corporation tax rate.
• Any remaining balance is next applied against the company's corporation tax liabilities for other accounting periods, and may also be surrendered in whole or part to fellow group members.
• After group surrender, any balance is used to discharge other amounts the company owes to HMRC, whether under legislation or related agreements.
• Any amount still remaining after all these steps is paid to the company in cash by HMRC, subject to restrictions where the company is in administration, liquidation, or has outstanding tax matters.