The Brits Are Coming – Creative Industry Tax Credits

It doesn’t seem 30 years since the late Colin Welland made his rallying call for the Brits at the Oscars.

It doesn’t seem 30 years since the late Colin Welland made his rallying call for the Brits at the Oscars.

I am mindful of what a great film “Chariots of Fire” is and how it’s stood the test of time. It’s amazing how a film can inspire and influence people. Film has always played a significant part in our cultural heritage and the UK government recognises this vital contribution.

The government has introduced a range of tax reliefs to promote, assist and incentivise the UK’s creative industries. These reliefs are substantial and it is essential for all eligible businesses to ensure they make timely claims that maximise the benefits available.

Film productions, TV programmes and video games must pass a ‘cultural test’ that qualifies them as British. Qualifying expenditure includes pre-production, principal photography, shooting, design, animation and post production.

Costs on advertising and marketing are excluded. The production must apply for the British Film Industry (BFI) Certificate to qualify as a British production. The team at the BFI are helpful and informative and will talk over any potential problems or issues with production companies or their advisors. The key driver here is that the British government wish to help creatives in every way possible.  The creative industry is a large and essential component of the UK economy.

Here is a summary of the reliefs available and how they work.

Film Tax Relief

Film production companies can claim corporation tax relief of up to 25% of their core expenditure – up to a cap of 80% of the total core expenditure. Where at least 80% of core expenditure is incurred in the UK, relief will be available of 20%.

High End Television Tax Relief

This is applicable to television programmes costing £1m or more per programme per hour. Qualifying TV programmes include dramas, comedies and documentaries. The corporation tax relief for high end television follows the formula for films detailed above.

Television Animation Tax Relief

A minimum of 51% of the total core expenditure needs to be spent on animation.  The corporation tax relief is the same as for films and high end television.

Video Games Tax Relief

At least 25% of the qualifying expenditure must be made in the European Economic Area (the EEA which includes the UK)03/02/2016.  The game must be intended for commercial release and the corporation tax relief follows the same model as that of films and high end television.

Theatre Tax Relief

Again, professional theatre and ballet companies can claim corporation tax relief of 25% on qualifying costs for touring productions and 20% for other productions.

Touring productions that incur total core expenditure of 80% or more are capped at 20% tax relief.

Orchestra Tax Relief

The UK government have introduced a new orchestra tax relief with effect from April 2016. There must be a minimum of 12 performances and the instruments must be drawn from one of the more traditional orchestra groupings, String, Woodwind, brass or percussion.

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