Chapter APC10200

Published date13 April 2016
Record NumberAPC10200
CourtHM Revenue & Customs

A State aid is defined in Article 107(1) Treaty on the Functioning of the European Union as:

‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods’. Any such aid ‘shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

The Department for Business, Energy & Industrial Strategy (BEIS) provides further information on State aids.

Companies applying for any of the Creative Industry Tax Reliefs, which are all State aids, must bear the following in mind when applying for relief.

State aid intensity and Cumulation

A Television Production Company must consider whether it has received any forms of aid from other sources as these must be ‘cumulated’ to arrive at the intensity figure.

Cumulation means that you must add up any State aid received from more than one source going to the same project.

Other forms of State aid may include: grants, direct payments, interest rate subsidies, tax reliefs, repayable advances, reimbursable grants, guarantees, tax advantage or exemption, risk finance, or any aid by a state or through its own resources. This list is not exhaustive and companies should determine whether any payments, grants etc. they receive are State aids which may need to be taken into account when determining whether the project has reached an intensity level. The intensity level is the maximum amount of State aid that a project is permitted to receive in relation to the budget, after cumulation from all sources.

High-end Television and Animation Tax Reliefs are State aids notified to the European Commission under the Cinema Communication. In common with other aids under this Communication, they have an intensity level (a maximum cumulation limit of State aid) of 50% of the budget for the programme concerned. Therefore, the aid received from all State aid sources must not exceed 50% of the total budget.

Children’s Television Tax Relief (CTR) is notified under the General Block Exemption Regulations (GBER). This has the same cumulation limit but adds further restrictions to the level of aid granted and the amount of overall aid that may be granted in any year. A recipient of aid under CTR cannot receive more than €75 million in any year. Additionally, the total aid that may be granted under the measure cannot exceed €150 million in any year.

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