Corporation Tax Act 2010 section 357UD

Tax credit: Northern Ireland supplementary deduction ignored

Section 357UD ensures that Northern Ireland supplementary deductions are excluded when calculating a company's surrenderable loss for the purposes of claiming a tax credit in respect of theatrical productions.

• When calculating a company's available (surrenderable) loss for an accounting period, any Northern Ireland supplementary deduction must be left out of the calculation.
• This exclusion applies both to Northern Ireland supplementary deductions made in the current accounting period and to those made in any earlier accounting period.
• The surrenderable loss is the amount a company can give up in exchange for a payable tax credit, so excluding these deductions prevents them from inflating the credit available.
• This rule ensures that the Northern Ireland supplementary deduction — which already provides a separate tax benefit through a lower Northern Ireland corporation tax rate mechanism — does not also increase the amount of loss that can be surrendered for a tax credit.