Corporation Tax Act 2009 section 1217ID

When costs are taken to be incurred

Section 1217ID establishes the rules for determining when costs of a theatrical production are treated as having been incurred for the purposes of the tax relief.

• Costs are only recognised to the extent they are reflected in the actual state of completion of the work in progress — advance payments are ignored until the related work is done
• Unpaid amounts are excluded unless there is an unconditional obligation to pay them
• Where a payment obligation is linked to income from the production, it is not treated as unconditional until an appropriate amount of that income has been brought into account
• Any amount still unpaid four months after the end of a period of account is disregarded entirely for that period