CREC022000 - Qualifying productions: television programmes
For a TV programme to qualify for an expenditure credit, it must meet the legislative definition of a ‘television programme,’ and also the qualifying criteria outlined in section 1179DE of the Corporation Tax Act (CTA) 2009.
Meaning of ‘television programme’
Section 1179DD CTA 2009 states:
“Television programme” means any programme (with or without sounds) which—
(a) is produced to be seen on television or on the internet, and
(b) consists of moving or still images or of legible text or of a combination of those things.
If two or more programmes are commissioned together under the same agreement, they are treated as a single programme for the purposes of the Audio-Visual Expenditure Credit (AVEC). For example, multiple episodes that are commissioned at the same time are treated as a single programme, but a separately commissioned episode or batch of episodes is treated as a separate programme even if the episodes form part of the same series.
Qualifying criteria – section 1179DE CTA 2009
A TV programme is a qualifying TV programme for AVEC if it meets the following criteria:
it is of an eligible category
it is not an excluded programme
it is intended for broadcast
it is certified as British (see CREC028000)
at least 10% of core expenditure on the programme is UK expenditure (see CREC029000)
If it is a high-end TV programme, the programme must also meet the slot length and hourly cost conditions (see CREC023000). Animated programmes and children’s programmes do not need to meet these extra conditions.
Eligible categories
The eligible categories of TV programme are:
High-end television (CREC023000): drama (including comedy) or documentary
Animation (CREC024000)
Children’s programme (CREC025000)
Please see the linked pages for the definition of each type of programme.
Animated programmes and children’s programmes receive a higher rate of credit than other types of programme – see CREC061300.
Excluded programmes
Section 1179DG CTA 2009 lists the categories of excluded programme. They are:
advertisements or other promotional material
news or current affairs programmes or discussion programmes
any quiz show, game show, panel show, variety show, chat show or similar entertainment
a programme that consists of or includes a competition or contest or announces the results of a competition or contest
any broadcast of live events or of theatrical or artistic performance given otherwise than for the purpose of being filmed
any programme produced for training purposes
These categories include many types of programme which might be argued as being a documentary or drama, but which are not intended recipients of AVEC. For example, a recording of a sporting event might be considered to be a documentary in some circumstances but will not qualify for AVEC.
For documentaries concerned with the performing arts and sports, it might be that elements of theatrical production or live events are used to document events or illustrate individuals’ actions. However, it will be a question of fact as to how the footage is used, whether as documentation or otherwise.
Some children’s programmes may qualify despite including a quiz, game, competition or contest – see CREC025000.
Meaning of ‘broadcast’ – section 1179DH CTA 2009
‘Broadcast’ means being broadcast on television, or via the internet, to the general public. Broadcast via the internet includes video on demand content held on streaming sites and social media. It does not include content which is only available for download. If a programme is restricted to a particular audience, such as training videos only available to employees of certain companies, it is not broadcast to the general public.
The fact that a programme is certified as British does not necessarily mean it is intended for broadcast. The Department for Culture, Media and Sport can certify programmes that are not so intended.
A programme may qualify as ‘intended for broadcast’ even if the intention is to gain a significant proportion of the earnings from broadcast overseas, rather than in the UK (although a British programme would normally be expected to be intended for UK broadcast).
Intention
The legislation does not specify whose ‘intention’ this should be, but at any time there will normally be someone entitled to determine how the programme is to be exploited. This would generally be the person who commissioned it – if a company, the directors of that company – but there may be cases where someone else has a prior claim.
It is not necessary for the programme to actually be broadcast on television or via the internet to meet this condition. However, if it was not eventually broadcast, the question arises of whether it was ever so intended (and, if so, when the intention changed).
If there is any doubt about the intention, the following factors would count in favour of the programme being intended for broadcast:
a finance plan written on the basis that the programme will be broadcast
a programme of a type commonly broadcast
production in a format suitable for broadcast
payment to actors and other participants on terms in line with those prevailing for programmes
the relevant person can demonstrate that, when television production activities began, there was an intention to seek a contract for broadcast of the programme
Where the production is commissioned by a film company or is clearly more suited to some distribution channel other than television or the internet, the broadcast condition may not be met. This will be the case even if the programme is eventually shown on television. For example, where a programme is intended for sale as a digital download initially and is ultimately shown on television, the condition would still not be met.
Broadcast condition not met
A TV programme can only be a qualifying programme for AVEC for a particular accounting period if, at the end of that period, it is intended for broadcast.
Note: this differs from the broadcast condition under Television Tax Relief (Part 15A CTA 2009), which was tested at the outset of production rather than for each accounting period.
If a programme is not intended for broadcast at the end of an accounting period, it cannot qualify for AVEC as a TV programme in respect of that period or any subsequent accounting period (but credits given in previous periods are not clawed back). However, if, at the end of the period, the programme is intended for theatrical release instead, it may qualify as a film (see CREC026000).
It may not be readily apparent whether a feature-length production is intended for broadcast on television as a programme or intended for theatrical release as a film. There may be more than one contingency plan for exploitation of the production. Where both conditions are met, the theatrical release condition takes precedence and the production is treated as a film.