Film expenditure

HMRC brought two appeals concerned with film finance and the availability of tax relief.

The first appeal concerned Micro Fusion a limited liability partnership. In its 2004/05 tax return the partnership claimed expenditure relating to production costs of a film.

These claims included one for £13 444 445 under F(No 2)A 1997 s 48 and another claim for £222 380 under F(No 2)A 1992 s 42.

HMRC disallowed the claims but the Special Commissioners ruled that the taxpayer was carrying on a trade including the exploitation of film and allowed the taxpayer’s appeal.

In the second appeal another partnership Halcyon Films carried on a trade including the exploitation of films.

It claimed expenditure of £12 183 932 under F(No 2)A 1992 s 42 in its tax return for 2003/04. Again HMRC disallowed...