Corporation Tax Act 2009 section 1179CI

Disqualifying arrangements and non-commercial transactions

Section 1179CI provides anti-avoidance rules that prevent companies from claiming audio-visual expenditure credits where they have entered into arrangements designed to artificially obtain or inflate those credits.

• A company that is party to disqualifying arrangements loses its entitlement to an expenditure credit entirely for the relevant production, and any tax returns already submitted must be amended
• Where a transaction arises from non-commercial arrangements (short of disqualifying arrangements) that would give the company a credit it would not otherwise receive, or a larger credit than it would otherwise receive, just and reasonable adjustments must be made
• Arrangements are disqualifying if one of their main purposes is to obtain a relevant advantage, unless obtaining that advantage can reasonably be regarded as consistent with the principles and policy objectives of the legislation
• Arrangements are broadly defined to include any scheme, agreement, or understanding, whether or not it is legally enforceable