Corporation Tax Act 2010 section 357UC

Northern Ireland supplementary deduction: amount

Section 357UC sets out how to calculate the amount of the Northern Ireland supplementary deduction for theatrical productions, using a formula that adjusts the additional deduction to reflect the difference between the main corporation tax rate and the Northern Ireland rate.

• The supplementary deduction is calculated using the formula (A − B) × (MR − NIR) / NIR, where A is the Northern Ireland additional deduction, B is any Northern Ireland losses surrendered for theatre tax credit, MR is the main corporation tax rate, and NIR is the Northern Ireland rate.
• If the accounting period falls entirely within one financial year, the formula is applied straightforwardly using the rates for that year.
• If the accounting period spans more than one financial year, you calculate a separate supplementary deduction for each financial year, weight each by the proportion of the accounting period falling in that year, and add the results together.
• The deduction effectively compensates for the difference between the main rate and the lower Northern Ireland rate, ensuring that relief is given at the appropriate level for qualifying theatrical production expenditure.