Creative industry tax reliefs: what every creative industry company should know

Creative industry tax reliefs are an evolving set of tax reliefs that exist to encourage UK creative industry growth.

Creative Industry Tax Reliefs can be broken down into:

·      Film tax relief

·      Animation tax relief

·      High-end TV and children’s programmes

·      Video Games Production tax relief

·      Theatre tax relief

·      Orchestra tax relief

These reliefs are available for

·      Film production companies producing films

·      Television production companies producing relevant animation or high-end television programmes

·      Video games development companies

·      Theatre production companies

·      Orchestra production companies

Qualifying companies are able to additional tax deductions of up to 100% of enhanceable expenditure or; if a loss is surrendered: 25% of the loss to the amount of enhanceable expenditure.

The 2017 spring budget announced that state aid approval will extend high-end TX animation and video games tax reliefs after 2018.

 


Film Tax Relief

 

Who is eligible?

·       British film

·       Film that is intended for theatrical release

·       Films where at least 10% of the total production costs relate to activities in the UK. (Prior to 1 April 2014 this figure was 25%).

 

Enhanceable Expenditure

The lesser of:

·       UK qualifying expenditure 

·       80% of total qualifying expenditure

 

Maximum claimable

Prior to 1 April 2015:

Limited-budget films relief

‘Limited-budget films’ are regarded as films with a budget of £20 million or less

Qualifying companies can claim either:

·       An additional tax deduction (the enhancement) of 100% of enhanceable expenditure; or

·       If a loss is surrendered: 25% of the loss up to the amount of enhanceable expenditure

As of 1 April 2015:

The distinction between limited budget and other films is removed.

Qualifying companies can claim either:

·       An additional tax deduction (the enhancement) of 100% of enhanceable expenditure

·       If a loss is surrendered: 25% of the loss up to the amount of enhanceable expenditure

 


Animation

Who is eligible?

·       Animations made in the EEA

·       Animations that are intended for broadcast

·       Animations where at least 51% of the total core expenditure is on animation

·       Animations where at least 10% of the total production costs relate to activities in the UK. (Prior to 1 April 2015 this figure was 25%).

 

There is no relief for a programme that is:

·       A advertisement or promotional programme

·       A news, current affairs or discussion programme

·       A quiz or game show, panel show, variety show etc.

·       Including an element of competition or contest

·       Broadcasting live events

·       Produced for training purposes

Enhanceable Expenditure:

The lesser of

·       UK qualifying expenditure

·       80% of total qualifying expenditure

Maximum claimable

Companies that qualify can claim either an additional tax deduction of enhanceable expenditure or if a loss is surrendered: 25% of the loss up to the amount of enhanceable expenditure

 


High-end TV

Who is eligible?

·       Programme made in the EEA 

·       Programmes intended for broadcast

·       Programmes that are either a drama, comedy or documentary

·       Programmes where at least 10% of the total production costs relate to activities in the UK

·       Prior to 1 April 2015 this figure was 25%

·       Programmes where the average qualifying production costs per hour of production length is not less than £1million per hour (not applicable for Children's TV)

·       The slot length in relation to the programme must be greater than 30 minutes (not applicable for Children's TV)

 

There is no high-end TV relief for Programmes that:

·       Are advertisements

·       Are news, current affairs or discussion programmes

·       Are quiz, game or panel shows

·       Consist of competition or contest

 

Enhanceable expenditure

The lesser of

·       UK qualifying expenditure

·       80% of total qualifying expenditure

 

Maximum claimable

Qualifying companies can claim either:

·       An additional tax deduction (the enhancement) of 100% of enhanceable expenditure

·       If a loss is surrendered: 25% of the loss up to the amount of enhanceable expenditure