[F1 ProfitsU.K.
Textual Amendments
F1Sch. 4: by Finance Act 1989 (c. 26, SIF 96), s. 181(1) it is provided that the Broadcasting Act 1981 shall have effect with respect to additional payments payable by programme contractors under that Act subject to the amendments made by Part I, and with the substitution, for Schedule 4 to that Act, of the provisions contained in Part II, of Schedule 16 to the Finance Act 1989 (c.26, SIF 96)
2(1)The profits of a programme contractor for an accounting period shall be computed in accordance with this paragraph.U.K.
(2)The profits shall consist of the excess of relevant income over relevant expenditure.
(3)“Relevant income” means—
(a)in relation to a programme contractor other than a DBS programme contractor or a DBS teletext contractor, income which accrues to the contractor in connection (directly or indirectly) with—
(i)the provision by the contractor of programmes for broadcasting on ITV, the Fourth Channel or a local sound broadcasting service, or
(ii)the provision by the contractor, for broadcasting, distribution or showing in the United Kingdom, of programmes provided by him for broadcasting on ITV, the Fourth Channel or a local sound broadcasting service;
(b)in relation to a DBS programme contractor or DBS teletext contractor, income which accrues to the contractor in connection (directly or indirectly) with—
(i)the provision by the contractor to the Authority, in accordance with the terms of his contract as a DBS programme contractor or (as the case may be) DBS teletext contractor, of programmes for broadcasting in the Authority’s DBS service to which his contract with the Authority relates, or
(ii)the provision by the contractor, for broadcasting, distribution or showing in the United Kingdom, of programmes broadcast in the Authority’s DBS service.
(4)Without prejudice to the generality of sub-paragraph (3), “relevant income” includes—
(a)all revenue which is advertising revenue for the purposes of this paragraph; and
(b)such part of any income which—
(i)accrues to any subsidiary of or company related to the programme contractor or to the contractor’s holding company, and
(ii)would be relevant income of that contractor if he and the subsidiary or related company or his holding company were a single programme contractor,
as, in the opinion of the Authority, should be attributed to the contractor as reflecting his financial interest in the subsidiary or the respective financial interests of the holding company in the contractor and the company related to the contractor or the financial interest of the holding company in the contractor, as the case may be.
(5)For the purposes of this paragraph advertising revenue includes—
(a)in relation to a DBS programme contractor, payments received or to be received by him in respect of charges made for the reception of programmes provided by him and broadcast in a DBS service;
(b)in relation to a teletext contractor, payments received or to be received by him in respect of charges made for the reception of programmes provided by him and broadcast in a DBS or additional teletext service.
(6)“Relevant expenditure”means any expenditure of the programme contractor which is properly chargeable to revenue account and which is incurred in connection with the provision by him of programmes of a kind mentioned in sub-paragraph (3).
(7)Without prejudice to the generality of sub-paragraph (6), “relevant expenditure” includes—
(a)expenditure in connection with the sale of rights to insert advertisements in programmes; and
(b)such part of any expenditure which—
(i)is incurred by any subsidiary of or company related to the programme contractor or by the contractor’s holding company, and
(ii)would be relevant expenditure of that contractor if he and the subsidiary or related company or his holding company were a single programme contractor,
as, in the opinion of the Authority, should be attributed to the contractor as reflecting his financial interest in the subsidiary or the respective financial interests of the holding company in the contractor and the company related to the contractor or the financial interest of the holding company in the contractor, as the case may be;
(c)in the case of a DBS programme contractor or a teletext contractor, any expenditure incurred in connection with the collection of charges for the reception of programmes provided by him and broadcast in a DBS service or in a DBS or additional teletext service, as the case may be; and
(d)in the case of a DBS programme or DBS teletext contractor, any expenditure incurred in connection with the provision of the satellite transponder.
(8)In ascertaining relevant income or relevant expenditure no account shall be taken of interest on any loan.
(9)Items of relevant income and items of relevant expenditure shall be attributed to accounting periods in accordance with the foregoing provisions of this Schedule.
(10)In this paragraph “programme” means—
(a)in the application of this Schedule in relation to the additional payments mentioned in section 32(1)(b), a television programme; and
(b)in the application of this Schedule in relation to the additional payments mentioned in section 32(2)(b), a local sound broadcast.]