CREC060100 - Expenditure credit calculation: overview

S1179CA CTA 2009 

A production company that meets the qualifying criteria for a Creatives Expenditure Credit is entitled to a taxable expenditure credit based on a percentage of qualifying expenditure incurred on a production. 

The amount of expenditure credit due to a company for each production is calculated on a cumulative basis. This means that the amount of qualifying expenditure on which the credit is based is: 

qualifying expenditure incurred to date 

minus

the corresponding amount in the last period in which the company made a claim for the production. 

In the first period for a production, there is no corresponding amount, so the credit is based only on qualifying expenditure incurred to date.


To calculate the amount of expenditure credit due for a production, companies should follow these 5 steps: 

  1. Find the amount of relevant global expenditure incurred to date. 

  2. Deduct any expenditure which is not UK expenditure to find the amount of UK expenditure. 

  3. Find the lesser of UK expenditure and 80% of relevant global expenditure. The lesser amount is the amount of qualifying expenditure to date. 

  4. Deduct from qualifying expenditure to date the equivalent amount for the last accounting period in which the company claimed an expenditure credit on the same production. The result is the amount of qualifying expenditure for the period. 

  5. Multiply qualifying expenditure for the period by the relevant percentage rate. 


The legislation can be found in section 1179CA of the Corporation Tax Act 2009. For more details on each step, please see CREC061000 onwards. 

Once a company has calculated the amount of expenditure credit due for each of its productions, it should apply the expenditure credit redemption steps (for which see CREC070000).