About UK creative industry tax reliefs

Film Tax Relief

Value of Film Tax Relief

  • For films with a total core expenditure of £20 million or less, the film production company can claim tax relief of up to 25% of UK qualifying film production expenditure;
  • For films with a core expenditure of more than £20 million, the film production company can claim a tax reliefof up to 25% on the first £20m of UK qualifying expenditure and 20% of UK expenditure thereafter;
  • Examples of a British film claiming tax relief can be found on the HM Revenue and Customs’ website.

Accessing Film Tax Relief

  • Film tax relief is available for British qualifying films. Films must either pass the Cultural Test or qualify as an official co-production;
  • Films must be intended for theatrical release;
  • Films, including those made under official co-production treaties, must have a minimum UK core spend requirement of 10%;
  • Tax relief is available on qualifying UK production expenditure on the lower of either: 80% of total core expenditure; or the actual UK core expenditure incurred.
  • There is no cap on the amount which can be claimed.
  • The film production company (FPC) responsible for the film needs to be within the UK corporation tax net.

Detailed guidance on the Film Tax Relief can be found on HMRC’s website.

High-End Television and Animation Programme Tax Reliefs

Value of High-end Television and Animation Programme Tax Reliefs

High-end Television and Animation tax relief is available on qualifying UK core production expenditure on the lower of either 80% of the total core expenditure or the actual UK core expenditure incurred.

There is no cap on the amount that can be claimed.

Accessing High-end Television (HETV) Tax Relief

In order to access HETV tax relief the programme must meet all of the following criteria:

  • It must qualify as British by either passing the High-end Television Cultural Test or as an official co-production (with treaty partners that allow for television).
  • The programme must be intended for broadcast (this includes the internet).
  • The programme is a drama, comedy or documentary (a list of excluded programmes can be found on HM Revenue and Customs’ website).
  • At least 25% of the core expenditure must take place in the UK.
  • The average qualifying production costs per hour of production length is not less than £1million per hour (Pro rata).
  • The slot length in relation to the programme must be greater than 30 minutes.
  • The television production company (TPC) responsible for the programme needs to be within the UK corporation tax net.

Detailed guidance on the HETV Tax Relief can be found on HMRC’s website.

Accessing Animation Tax Relief

In order to access animation tax relief the programme must meet all of the following criteria:

  • It must qualify as British by either passing the Animation Cultural Test or qualify as an official co-production (with treaty partners that allow for television)
  • The programme must be intended for broadcast (this includes the internet).
  • At least 51% of the total core expenditure is on animation.
  • At least 25% of the core expenditure must be UK expenditure.
  • The animation production company (APC) responsible for the programme needs to be within the UK corporation tax net.

The programme must not be one of the excluded programmes (a list of excluded programmes can be found on HMRC’s website).

Detailed guidance on the Animation Tax Relief can be found on HMRC’s website.

Video Games Tax Relief

Value of Video Games Tax Relief

  • Video Games tax relief is available on qualifying UK/EEA production expenditure on the lower of either 80% of the total core expenditure or the actual UK/EEA core expenditure incurred.
  • There is no cap on the amount that can be claimed.

Accessing Video Games Tax Relief

  • It must qualify as British under the Video Games Cultural Test.
  • The video game must be intended for release.
  • At least 25% of the core expenditure must take place in the UK/EEA.
  • The video game development company (VGDC) responsible for the video game needs to be within the UK corporation tax net.

Further details on accessing the Video Games Tax Relief can be found on HMRC’s website

Minimum UK spend requirement

There is a minimum spend requirement for qualifying production expenditure which is different depending upon which tax relief you are looking at, they are as follows:

  • Films must have a minimum of 10% of costs thatare spent on UK qualifying production expenditure.
  • HETV and Animation programmes must have a minimum of 25% of costs spent on UK qualifying production expenditure.
  • Video Games must have a minimum of 25% of costs spent on UK/EEA state qualifying production expenditure.

UK qualifying production expenditure is defined as expenditure incurred on production activities (pre-production, principal photography/animation shooting/designing/producing and post production) which take place within the UK, irrespective of the nationality of the persons carrying out the activity.

For video games, this is extended to EEA state qualifying expenditure. Read the full list of EEA states.

HM Revenue & Customs’ (HMRC) definition of UK spend introduces the concept of where a good or service is “used or consumed” in the UK. If they are used or consumed in the UK, the expenditure is treated as UK expenditure (under the rules set out in the clauses of the Finance Bill). If they are used or consumed outside the UK, they do not count as UK expenditure.

Further details on the definition of “used or consumed” are available in HMRC’s guidance on Film Tax Relief.

HMRC Creative Industry Tax Unit

The UK now has a specialist government unit to deal with the corporation tax affairs of companies which are eligible for one of the creative industry tax reliefs. Any queries relating to eligibility for tax relief should be directed here.

Creative Industries Unit
Local Compliance SO717
PO Box 3900
Glasgow
G70 6AA

Tel: 03000 510 191

Email: creative.industries@hmrc.gsi.gov.uk

Website: hmrc.gov.uk/ct/forms-rates/claims/creative-industries.htm

Further guidance

Media lawyers and accountants can provide advice on British qualification and accessing UK tax relief. Contact information can be found in UK production directories:

Read more

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