CREC061200 - Expenditure credit calculation: steps 3-4

S1179CA CTA 2009听

Step 3听

Find qualifying expenditure to date.听

Qualifying expenditure to date is the lower of either:听

  • UK expenditure to date (the result of step 2); or听

  • Relevant global expenditure (the figure from step 1) capped at 80%听

听

Example听

Company A has incurred 拢200,000 relevant global expenditure on a children鈥檚 TV programme, so its step 1 figure is 拢200,000.听

拢30,000 of that expenditure is not UK expenditure, so its step 2 result is 拢200,000 - 拢30,000 = 拢170,000.听

Qualifying expenditure to date, at step 3, is the lower of:听

  • UK expenditure to date, 拢170,000, and听

  • Relevant global expenditure capped at 80%, which is 拢200,000 x 80% = 拢160,000听

Qualifying expenditure to date is therefore 拢160,000.听

听

Step 4听

Find qualifying expenditure for the period.听

Qualifying expenditure for the period is:听

Qualifying expenditure to date (the result of step 3)
minus
Qualifying expenditure to date in the most recent accounting period in which the company claimed an expenditure credit for the same production, if any.


Example听

Company B is producing an animated film. The current accounting period is the second period for which it has claimed an Audio-Visual Expenditure Credit (AVEC).听

At step 3, Company B calculated its qualifying expenditure to date for the current accounting period as 拢250,000. In the previous听accounting period in which Company B claimed an expenditure credit, it had qualifying expenditure to date at step 3 of 拢150,000.听

Company B鈥檚 qualifying expenditure for the period is therefore 拢250,000 - 拢150,000 = 拢100,000.听