CREC054100 - Eligible expenditure: UK expenditure: used or consumed

The amount of expenditure credit to which a film, TV programme or video game is entitled is determined by the amount of relevant global expenditure which is also UK expenditure. 

UK expenditure is defined as expenditure on goods or services that are used or consumed in the United Kingdom (s1179AB Corporation Tax Act 2009). 

The nationality of those providing the goods and services has no bearing on whether the expenditure qualifies as UK expenditure. The ‘used or consumed’ test does not focus on the supplier of goods and services but instead concentrates on the recipient or customer as the means of determining UK expenditure. 

In order to determine whether an item of expenditure incurred in relation to a production should be treated as UK expenditure, it is necessary to establish: 

• the nature of the specific goods or services in question

• the place where the recipient uses or consumes those goods and services

When a production company incurs expenditure on hiring other companies or individuals to work on a production, it is responsible for assessing the proportion of that expenditure which is UK expenditure, and checking any information provided by suppliers. For example, a film production company which pays for the services of a VFX studio is responsible for making sure that the VFX studio provides accurate information on the proportion of the work that is used or consumed in the UK.