Corporation Tax Act 2010 section 357SC

Northern Ireland supplementary deduction: amount

Section 357SC provides the formula for calculating the amount of the Northern Ireland supplementary deduction that a television production company can claim against its Northern Ireland trading profits.

• The supplementary deduction is calculated as (A − B) × ((MR − NIR) / NIR), where A is the Northern Ireland additional deduction for the period, B is any Northern Ireland losses surrendered under section 1216CH of CTA 2009, MR is the main corporation tax rate, and NIR is the Northern Ireland rate
• The formula effectively uplifts the net deduction amount (after subtracting surrendered losses) by the proportionate difference between the main rate and the Northern Ireland rate
• Where an accounting period straddles two financial years, the calculation must be performed separately for each financial year, time-apportioned according to the fraction of the accounting period falling in each year, and then aggregated
• The surrendered losses (B) reduce the base amount before the rate differential multiplier is applied, ensuring that losses already used for television tax credit relief do not also generate a supplementary deduction