The UK is the world leader in many creative industries – luminaries such as John Lennon, David Bowie, Mick Jagger, David Bailey, Andrew Lloyd Webber, Alexander McQueen, Vivian Westwood, Stella McCartney, Howard Pinter, Michael Caine, Christopher Nolan, Ridley Scott – lists just roll on and on. For such a small island nation our reach, prestige and impact on the world stage is phenomenal.
Culture is a fundamental part of our ‘soft power’ – the ability to attract and persuade by means other than military or financial. The creative industries employ almost two million people in the UK and generate around £80bn of revenue. One in eleven jobs is a creative job and one in six graduates now have a creative role.
These are all heady numbers that corroborate just how important the creative industry is.
However, the paths for finance are far from clear and remain daunting particularly for many start ups. There are in fact many routes to finance. A few of which are:
Film, High End Television and Video Games Tax Relief. Companies can claim Corporation Tax Relief of up to 25% of core expenditure in the UK up to a cap of 80% of total core expenditure.
British Film Institute (BFI). The BFI is the UKs lead organisation for film. The BFI invest national lottery and government funds to support film development, productions and distributions.
Around 25 feature productions are supported annually by the BFI at a cost of around £23M.
Accelerators. These are particularly useful for start ups and are often supported by the national or local government. A typical accelerator will provide expert advice, monitoring practical and technical support to groups of new ventures over several months.
Equity Crowd Funding. This has become both high profile and popular. Funding for creatives engages many members of the public because they ‘get’ the business model and various incentives such as attendance at the premises, walk ins etc. appeal.
Creative England. Creative England invests in TV, film and digital media by way of direct investment and loans. Interest free loans are available of up to £200,000 for established SME’s. It also has its own Digital Accelerator based in Bournemouth.
Tax incentives for individual investors. There are many alternative tax incentives for individuals to reduce and/or defer income tax and capital gains tax by subscribing fee equity in companies. The two key government schemes (EIS) and the Seed Investment Scheme (SEIS). All eligible companies should and no doubt take advantage of these alternative tax breaks for investors.
The British Business Bank. The British Business Bank works alongside around 80 practice organisations that make direct investments or loans. Its programme supports £2.4bn of finance and it plays a key role in a further £3.3bn of funding.
We are waiting for the launch of a new Enterprise Capital Fund that will invest in innovative businesses within creative industries.
The above listing is not an exclusive list. It does not take account of high net wealth individuals or corporations who may not have a high profile or any profile for their appetite to invest but number a large and growing investment community for creatives.