Section 357CG Adjustments in calculating profits of tradeF1

This section applies for the purposes of determining F2under section 357C the relevant IP profits of a trade of a company for an accounting period.

In calculating the profits of the trade for the accounting period—

The amounts to be added are—

The amounts to be deducted are F7—

In a case where there is a shortfall in R&D expenditure in relation to the trade for a relevant accounting period (see section 357CH), the amount of R&D expenditure brought into account in calculating the profits of the trade for that accounting period is to be increased by the amount mentioned in section 357CH(2).

In a case where—

the amount of qualifying expenditure brought into account in calculating the profits of the trade for that accounting period is to be increased by the amount mentioned in section 357CHA(2).

For the purposes of F12subsections (5) and (5A) —

• F13“qualifying expenditure”—

• 1. (a)

     in relation to a company that is a television production company, has the same meaning as in Chapter 3 of Part 15A of CTA 2009, F14...

  2. (b)

     in relation to a company that is a video games development company, has the same meaning as in Chapter 3 of Part 15B of that Act F15, and

  3. (c)

     in relation to a company that is the production company (as defined in section 1217FC of that Act) in relation to a theatrical production, has the same meaning as in Part 15C of that Act,

• “R&D expenditure” means expenditure on research and development in relation to the trade,

• “relevant accounting period”, in relation to a company, means—

  1. (a)

     the first accounting period for which—

     1. (i)

        the company is a qualifying company, and

     2. (ii)

        an election under F16section 357A(1) has effect in relation to it, and

     3. (b)

        each accounting period that begins before the end of the period of 4 years beginning with that accounting period, F17...

• “research and development” means activities, other than oil and gas exploration and appraisal, that fall to be treated as research and development in accordance with generally accepted accounting practice.

• F18“the separate programme trade”, in relation to a television production company, has the same meaning as in Chapter 2 of Part 15A of CTA 2009 (see section 1216B),

• “the separate video game trade”, in relation to a video games development company, has the same meaning as in Chapter 2 of Part 15B of CTA 2009 (see section 1217B),

• “television production company” has the same meaning as in Part 15A of CTA 2009 (see section 1216AE), F19...

• F20“theatrical production” has the same meaning as in Part 15C of CTA 2009 (see section 1217FA of that Act), and

• “video games development company” has the same meaning as in Part 15B of CTA 2009 (see section 1217AB).