CREC061200 - Expenditure credit calculation: steps 3-4

S1179CA CTA 2009 

Step 3 

Find qualifying expenditure to date. 

Qualifying expenditure to date is the lower of either: 

  • UK expenditure to date (the result of step 2); or 

  • Relevant global expenditure (the figure from step 1) capped at 80% 

 

Example 

Company A has incurred £200,000 relevant global expenditure on a children’s TV programme, so its step 1 figure is £200,000. 

£30,000 of that expenditure is not UK expenditure, so its step 2 result is £200,000 - £30,000 = £170,000. 

Qualifying expenditure to date, at step 3, is the lower of: 

  • UK expenditure to date, £170,000, and 

  • Relevant global expenditure capped at 80%, which is £200,000 x 80% = £160,000 

Qualifying expenditure to date is therefore £160,000. 

 

Step 4 

Find qualifying expenditure for the period. 

Qualifying expenditure for the period is: 

Qualifying expenditure to date (the result of step 3)
minus
Qualifying expenditure to date in the most recent accounting period in which the company claimed an expenditure credit for the same production, if any.


Example 

Company B is producing an animated film. The current accounting period is the second period for which it has claimed an Audio-Visual Expenditure Credit (AVEC). 

At step 3, Company B calculated its qualifying expenditure to date for the current accounting period as £250,000. In the previous accounting period in which Company B claimed an expenditure credit, it had qualifying expenditure to date at step 3 of £150,000. 

Company B’s qualifying expenditure for the period is therefore £250,000 - £150,000 = £100,000.