CREC063100 | Expenditure credit calculation: examples: single-period production

Company A is producing an animated TV programme. This is the first claim the company has made for the programme.

Note: ‘to date’ means up to the end of the accounting period to which the claim relates.

Step 1 - Find the amount of relevant global expenditure (CREC051000)

Relevant global expenditure is expenditure that is brought into account as part of the separate trade, is core expenditure and is not excluded expenditure.

Assuming that all of Company A’s core expenditure has been brought into account as part of total expenditure, and that all excluded expenditure is core expenditure, relevant global expenditure is:

£280,000 - £30,000 = £250,000

Step 2 – Deduct non-UK expenditure from the result of step 1

Assuming that all of Company A’s non-UK expenditure is core expenditure but is not also excluded expenditure:

£250,000 - £70,000 = £180,000

UK expenditure is therefore £180,000

Step 3 – Find the lesser of UK expenditure and 80% of relevant global expenditure

UK expenditure (the result of step 2) = £180,000

80% of relevant global expenditure = £250,000 x 80% = £200,000

The lesser amount (£180,000) is ‘qualifying expenditure to date’.

Step 4 – Deduct ‘qualifying expenditure to date’ in the last period in which the company claimed a credit from ‘qualifying expenditure to date’ in the current period

Because this is the company’s first claim for this production, there is no need to do anything at this step. ‘Qualifying expenditure for the period’ is equal to ‘qualifying expenditure to date’: £180,000.

Step 5 – Multiply ‘qualifying expenditure for the period’ by the relevant percentage

Because Company A is making an animated TV programme, the relevant percentage is 39%.

The amount of credit to which Company A is entitled is £180,000 x 39% = £70,200.