What are Creative Industry Tax Reliefs?
The Creative Industry reliefs consist of a number of tax reliefs targeted to companies that work in the creative arts. These include
Video Games
Films
Animations
High End Television
Children's television
These tax reliefs work in the same way as research and development tax credits offering a tax reduction if the company is making a profit or a payable tax credit if the company is loss making.
To claim these reliefs the company needs to be liable to corporation tax, so businesses that are sole traders, partnerships or limited liability partnerships will not be able to claim.
Your company needs to be directly involved in the production, negotiating contracts, paying for services and involved in the decision making about the project.
To claim relief you need to pass a cultural test or qualify through an agreed international agreement. The cultural tests are managed by the British Film Institute (Bfi).
Video Games Tax Relief
To qualify for video games tax relief you need to have a game that is intended to be published. These games can be for any platform PC, Smartphone,Console and any other device.
It needs to be certified as culturally British.
And at least 25% of the production costs are incurred in the EEA (European Economic Area)
What costs are allowed?
Generally the costs of production are going to be allowed for enhancement in the claim these can include testing the game. But the original concept design and maintenance of the game will not be allowed to be included in the qualifying expenditure.
Film Tax Relief
To qualify for film tax relief you need to make sure that at least 10% of the production costs are incurred in the UK and 25% of the core expenditure is spent in the EEA.
The film must be intended for release.
The film must also pass the culturally British test as defined by the Bfi or be part of an internationally agreed co-production treaty.
What costs are allowed?
The costs of producing the film will be allowed in the claim. That includes the cost of pre-production, production and post production including any CGI work that is included in the film. The costs of writing and establishing the viability of the film will not be a cost that can be included in the tax relief claim.
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Animation Tax Relief
To qualify for the animation tax relief is available for animation production companies whose animation passes the culturally British test and is certified by the Bfi or qualify through an internationally agreed co-production treaty.
The animation must be intended for release and this includes online streaming.
At least 51% of the core expenditure is on animation shooting
10% of the total production costs relate to expenditure in the UK.
What costs are allowed?
The costs of producing the animation are allowed in the tax relief claim. That includes pre-production, the cost of the core animation shooting and post-production costs. The costs of writing and establishing the viability of the project is not allowed in the claim.
High End Television Relief
A production company can claim high end television relief if the programme is certified as British by the Bfi, is intended for broadcast to the general public this includes online streaming.
The programme must be a drama, comedy or a documentary.
The average core expenditure is at least £1 million per one hour of programming
Each episode must be longer than 30 minutes.
What costs are allowed?
The costs allowed in the tax relief are the pre-production, principal shooting including any CGI costs and the post-production costs. The costs involved in development and establishing if the project is viable are not allowed to be claimed.
Children's Television Tax Relief
A television show is classed as being for children if the intended core audience for the programme is under 15 years of age. To qualify for children’s television tax relief the TV programme must be certified by the Bfi or qualify through an internationally agreed co-production treaty.
The television programme must be intended for broadcast and this again includes online streaming.
At least 10% of the core costs of the production must be expenditure incurred in the UK.
What costs are allowed?
A production company can claim the costs of pre-production, shooting of the programme and the post-production costs. The costs of development and establishing if the project is viable will not be allowed in the tax relief claim.
Next Steps
If you are interested in discussing your eligibility to claim a creative tax relief please contact us below to arrange a time to discuss.