Taxation of film production companies

By Tolley in association with Richard Palmer

The following Corporation Tax guidance note by Tolley in association with Richard Palmer provides comprehensive and up to date tax information covering:

  • Taxation of film production companies
  • Introduction
  • Meaning of a film
  • Meaning of FPC
  • Co-productions
  • Taxation of film production companies
  • Calculation of income and costs
  • Costs of the film
  • Calculating profits and losses of separate film trade
  • Estimates
  • Timing of costs
  • Utilisation of FPC losses
  • Election for FPC legislation not to apply


Finance Act 1996 introduced a special regime for film production companies, now included in CTA 2009, ss 1188–1216. The legislation has two parts, firstly, legislation that applies to all companies regarding the recognition of income and costs and the treatment of losses, and a second part that provides for a repayable tax credit to the company where a qualifying film is produced. For details of the film tax credit, see the Film production company tax credits guidance note. Film production companies have their own HMRC tax manual, ‘Film Production Companies’ (FPC). Finance Act 2013 introduced a separate tax regime for companies producing television and animation programmes. See the Television tax reliefs ― key provisions guidance note for further details.

Please note that all references to the FPC HMRC manual in this guidance note are subscription sensitive.

Meaning of a film

A film is defined in CTA 2009, s 1181 as being “a sequence of visual images that is capable of being used as a means of showing that sequence as a moving picture”. It includes images generated by computer and the soundtrack. It does not need to be a UK film.

CTA 2009, s 1183(2)

Where the film production is a series, it will be treated as a single film provided it constitutes a self-contained work or a series of documentaries with a common theme, there are no more than 26 parts and the playing time is no more than 26 hours.

CTA 2009, s 1181(3); FPC10100
Meaning of FPC

To qualify as an FPC under CTA 2009, s 1182, the FPC must:

  • be responsible for the pre-production, principal photography and the post production of the film as well as

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