CREC054220 - Eligible expenditure: UK expenditure: film and TV examples: services not directly related to a single territory
In the case of some services, it is not obvious where the services are ‘used or consumed’. Generally these are services:
which do not involve, or are not directly linked to, principal photography, or
where the location of any physical performance is difficult to determine.
This includes, in particular, services supplied by the director, screenwriter, composer, production designer and researcher.
It is also common for some of these services to be used or consumed in more than one way. The only way to determine whether such services are used or consumed within the UK is by looking at the facts in each case, and where necessary, apportioning the costs between UK and non-UK expenditure.
Example 1: screenwriter
A production company decided to make a film of a book to which it holds the film rights. It enlists a screenwriter to prepare the initial drafts of a screenplay and to rework them into a script which is used as the basis of filming. The nature of the services provided by a screenwriter is the provision of a script.
The script is used as follows:
| Activity | Location |
|---|---|
| Preparing costings and shooting schedule | UK |
| Rehearsals | UK |
| Principal photography | Part UK, part overseas |
| Post-production | Part UK, part overseas |
The script is used in the UK to the extent to which those activities take place in the UK. To the extent that the script is used or consumed during that part of principal photography which takes place in the UK, then it will be UK expenditure, since the script is used or consumed is in the UK. Likewise, where it is used as the basis of recording a voiceover during post-production, the expenditure on the script will be UK expenditure to the extent that recording takes place in the UK.
The same principle applies even if the screenwriter is resident overseas and/or writes the script while not in the UK. It is the location where the script is used that determines to what extent the expenditure incurred on it is UK expenditure.
It follows from this that any expenditure on a script which is supplied in order to facilitate rehearsal, principal photography or dubbing of dialogue where those activities take place outside the UK is not expenditure on a service which is used or consumed within the UK. This is true even where the screenwriter has physically written the script in the UK, and where the expenditure is incurred by a UK-based production company.
Example 2: Voice/dialect coach
An American actor is to play the leading role in a TV programme to be filmed in the UK and set in nineteenth-century London. A voice coach is hired to work with the actor in the United States prior to the commencement of rehearsals and filming.
The nature of the service is that of coaching the actor. That service is consumed by the actor wherever the actor is. If the actor is in the United States, the expenditure is not UK expenditure. This remains so even if the coaching is delivered remotely from the UK.
Likewise, if the actor is located in the UK when the coaching is given, the point of consumption is in the UK, regardless of the location of the coach.
Flights and other travel
Expenditure on plane tickets and other travel costs is UK expenditure if part of the journey takes place in the UK. Therefore, the costs will be eligible for relief if the travel is:
wholly within the UK
From the UK to a destination abroad
To the UK from a destination abroad
Expenses for travel between destinations outside of the UK will not qualify.
If a journey is in two legs, only the leg to or from the UK will qualify. For example, if the journey consists of a flight from Birmingham to Paris, a stopover in Paris, then an onwards flight to Rome, only the leg from Birmingham to Paris is UK expenditure.
If the journey has been paid for as a single trip, the cost should be apportioned on a just and reasonable basis.
The same principle applies to the cost of transporting goods/items for use in the production.