CREC063100 - Expenditure credit calculation: examples: single-period production

Company A is producing an animated TV programme. This is the first claim the company has made for the programme. 

Description	Amount (£)
Total expenditure to date	300,000
Core expenditure to date	280,000
Excluded expenditure to date	30,000
Non-UK core expenditure to date	70,000
Qualifying expenditure to date in last period in which a claim was made	n/a

Note: ‘to date’ means up to the end of the accounting period to which the claim relates. 

Step 1 - Find the amount of relevant global expenditure (CREC051000) 

Relevant global expenditure is expenditure that is brought into account as part of the separate trade, is core expenditure and is not excluded expenditure. 

Assuming that all of Company A’s core expenditure has been brought into account as part of total expenditure, and that all excluded expenditure is core expenditure, relevant global expenditure is: 

£280,000 - £30,000 = £250,000 

Step 2 – Deduct non-UK expenditure from the result of step 1 

Assuming that all of Company A’s non-UK expenditure is core expenditure but is not also excluded expenditure: 

£250,000 - £70,000 = £180,000 

UK expenditure is therefore £180,000 

Step 3 – Find the lesser of UK expenditure and 80% of relevant global expenditure 

UK expenditure (the result of step 2) = £180,000 

80% of relevant global expenditure = £250,000 x 80% = £200,000 

The lesser amount (£180,000) is ‘qualifying expenditure to date’. 

Step 4 – Deduct ‘qualifying expenditure to date’ in the last period in which the company claimed a credit from ‘qualifying expenditure to date’ in the current period 

Because this is the company’s first claim for this production, there is no need to do anything at this step. ‘Qualifying expenditure for the period’ is equal to ‘qualifying expenditure to date’: £180,000. 

Step 5 – Multiply ‘qualifying expenditure for the period’ by the relevant percentage 

Because Company A is making an animated TV programme, the relevant percentage is 39%. 

The amount of credit to which Company A is entitled is £180,000 x 39% = £70,200.