Corporation Tax Act 2009 section 1217CL

Artificially inflated claims for additional deduction or tax credit

Section 1217CL is an anti-avoidance rule that prevents companies from claiming video games development tax relief where the claim has been artificially inflated through contrived arrangements.

• Any transaction linked to arrangements entered into for a disqualifying purpose must be ignored when calculating the additional deduction or video games tax credit
• Arrangements have a disqualifying purpose if their main object, or one of their main objects, is to enable a company to obtain a deduction or credit it would not otherwise receive, or a larger one than it would otherwise be entitled to
• The rule applies whether the arrangements were entered into wholly or only partly for the disqualifying purpose
• "Arrangements" is broadly defined to include any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable