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16 October 2000
It has come to light that, due to faulty drafting, a section in the Finance Act 2000 unintentionally withdrew tax relief for master audio tapes and discs. Rather than correct the error in the next Finance Act, the Revenue has announced an extra-statutory concession to provide a remedy. Regrettably there does not seem to be much hope for making our tax system readily accessible if this is to be the ongoing strategy.
It has come to light that, due to faulty drafting, a section in the Finance Act 2000 unintentionally withdrew tax relief for master audio tapes and discs. Rather than correct the error in the next Finance Act, the Revenue has announced an extra-statutory concession to provide a remedy. Regrettably there does not seem to be much hope for making our tax system readily accessible if this is to be the ongoing strategy.
Section 113, Finance Act 2000 allowed the costs of producing or acquiring a film, tape or disc as a revenue expense. This was largely a clarifying provision which was not intended to make any substantial change. Unfortunately the definition of the expenditure which qualified referred only to film rights, thus excluding audio material not associated with a film. The new extra-statutory concession ensures that expenditure on the production or acquisition of all master audio tapes and discs will still be eligible for tax relief, and this was announced on 12 October 2000. It confirms that such expenditure will still be treated as revenue expenditure. The text of Extra-statutory Concession B54 follows.
'Notwithstanding section 113(2), Finance Act 2000, master audio tapes or discs shall be deemed to be included in the definitions in section 68(2), Capital Allowances Act 1990. This ensures that treatment of the expenditure on production of master audio tapes or discs will continue to be treated as expenditure of a revenue nature. This concession has effect from 6 April 2000.'
(Source: Inland Revenue press release dated 12 October 2000.)
Section 113, Finance Act 2000 allowed the costs of producing or acquiring a film, tape or disc as a revenue expense. This was largely a clarifying provision which was not intended to make any substantial change. Unfortunately the definition of the expenditure which qualified referred only to film rights, thus excluding audio material not associated with a film. The new extra-statutory concession ensures that expenditure on the production or acquisition of all master audio tapes and discs will still be eligible for tax relief, and this was announced on 12 October 2000. It confirms that such expenditure will still be treated as revenue expenditure. The text of Extra-statutory Concession B54 follows.
'Notwithstanding section 113(2), Finance Act 2000, master audio tapes or discs shall be deemed to be included in the definitions in section 68(2), Capital Allowances Act 1990. This ensures that treatment of the expenditure on production of master audio tapes or discs will continue to be treated as expenditure of a revenue nature. This concession has effect from 6 April 2000.'
(Source: Inland Revenue press release dated 12 October 2000.)
