Innvotec 6 LLP v Revenue & Customs (INCOME TAX/CORPORATION TAX : relief for expenditure on qualifying film)

Income tax � 100% relief for expenditure on qualifying film � s 42 Finance (No 2) Act 1992 and s 48 Finance (No 2) Act 1997 � delay in obtaining certificate as to status of film � whether claim made out of time � alternative claim for subsequent year under s 140 Income Tax (Trading and Other Income) Act 2005 � whether allocation of expenditure to relevant year made out of time � whether valid provisional claim made � whether certification of film by Hungarian authorities under European Convention on Cinematic Co-production sufficient � appeal dismissed">

Sitting in public at Centre City Tower, Birmingham on 1 November 2018, with subsequent written submissions

This appeal is concerned with the availability of accelerated relief for expenditure incurred by the appellant on the purchase of the master negative of a film for some �5.8 million in November 2004.� The appellant claims relief for the full purchase cost in the year 2004-05 pursuant to section 42 Finance (No 2) Act 1992 (�FA92�), as applied by section 48 Finance (No 2) Act 1997 (�FA97�); in the alternative, it claims relief for the same amount in the year 2005-06 pursuant to section 140 Income Tax (Trading and Other Income) Act 2005 (�ITTOIA�).

HMRC do not dispute the availability of the relief on �anti-avoidance� grounds; they essentially argue that as the requisite certificate from the Department of Culture, Media and Sport (�DCMS�) was not provided in respect of the film in question until 2014, the appellant has failed to satisfy the statutory grounds for either relief in time.

(1) Andrew Bradley of HMRC, formerly an investigator in their Film Team.� Mr Bradley had been involved in correspondence on behalf of HMRC on this matter from January 2015 until March 2017, when he had moved to a different role within HMRC.� He had issued HMRC�s �view of the matter� letter dated 18 January 2016.