CREC063200 - Expenditure credit calculation: examples: multi-period production
Company B is producing a video game.听
AP1听
Description听 |
Amount (拢)听 |
Total expenditure to date听 |
200,000听 |
Core expenditure to date听 |
190,000听 |
Excluded expenditure to date听 |
15,000听 |
Non-UK core expenditure to date听 |
25,000听 |
Qualifying expenditure to date in last period in which a claim was made听 |
n/a听 |
Note: 鈥榯o date鈥� means up to the end of the accounting period to which the claim relates.听
Step 1 - Find the amount of relevant global expenditure听
Relevant global expenditure must be expenditure which is brought into account as part of the separate trade, is core expenditure and is not excluded expenditure.听
Assuming that all of Company B鈥檚 core expenditure has been brought into account as part of total expenditure, and that all excluded expenditure is core expenditure, relevant global expenditure is:听
拢190,000 - 拢15,000 = 拢175,000听
Step 2 鈥� Deduct non-UK expenditure from the result of step 1听
Assuming that all of Company B鈥檚 non-UK expenditure is core expenditure but is not also excluded expenditure:听
拢175,000 - 拢25,000 = 拢150,000听
UK expenditure is therefore 拢150,000听
Step 3 鈥� Find the lesser of UK expenditure and 80% of relevant global expenditure听
UK expenditure (the result of step 2) = 拢150,000听
80% of relevant global expenditure = 拢175,000 x 80% = 拢140,000听
The lesser amount (拢140,000) is 鈥榪ualifying expenditure to date鈥�.听
Step 4 鈥� Deduct 鈥榪ualifying expenditure to date鈥� in the last period in which the company claimed a credit from 鈥榪ualifying expenditure to date鈥� in the current period听
Because this is the company鈥檚 first claim for this production, there is no need to do anything at this step. 鈥楺ualifying expenditure for the period鈥� is equal to 鈥榪ualifying expenditure to date鈥�: 拢140,000.听
Step 5 鈥� Multiply 鈥榪ualifying expenditure for the period鈥� by the relevant percentage听
Because Company B is making a video game, the relevant percentage is 34%.听
The amount of credit to which Company B is entitled for AP1 is 拢140,000 x 34% = 拢47,600
AP2听
Description听 |
AP1 amount (拢)听 |
AP2 amount (拢)听 |
Total (拢)听 |
Total expenditure听 |
200,000听 |
150,000听 |
350,000听 |
Core expenditure听听 |
190,00听 |
130,000听 |
320,000听 |
Excluded expenditure听 |
15,000听 |
10,000听 |
25,000听 |
Non-UK core expenditure听 |
25,000听 |
20,000听 |
45,000听 |
Qualifying expenditure to date in last period in which a claim was made听 |
N/A听 |
140,000听 |
-听 |
鈥�To date鈥� means up to the end of the accounting period to which the claim relates, therefore in the second AP it includes all the expenditure from both AP1 and AP2.听听
Step 1 - Find the amount of relevant global expenditure听
Making the same assumptions as in AP1, relevant global expenditure is:听
拢320,000 - 拢25,000 = 拢295,000听
Step 2 鈥� Deduct non-UK expenditure from the result of step 1听
拢295,000 - 拢45,000 = 拢250,000听
UK expenditure is therefore 拢250,000.听
Step 3 鈥� Find the lesser of UK expenditure and 80% of relevant global expenditure听
UK expenditure (the result of step 2) = 拢250,000听
80% of relevant global expenditure = 拢295,000 x 80% = 拢236,000听
The lesser amount (拢236,000) is 鈥榪ualifying expenditure to date鈥�.听
Step 4 鈥� Deduct 鈥榪ualifying expenditure to date鈥� in the last period in which the company claimed a credit from 鈥榪ualifying expenditure to date鈥� in the current period听
The most recent period in which Company B claimed a credit was the previous听period, AP1. 鈥楺ualifying expenditure to date鈥� in AP1 was 拢140,000.听
拢236,000 - 拢140,000 = 拢96,000听
鈥楺ualifying expenditure for the period鈥� is therefore 拢96,000.听
Step 5 鈥� Multiply 鈥榪ualifying expenditure for the period鈥� by the relevant percentage听
The relevant percentage is still 34%.听
The amount of credit to which Company B is entitled for AP2 is 拢96,000 x 34% = 拢32,640听