On 20 July 2017 HMRC published updated statistics on claims for creative industries tax relief. The statistics include data for film tax relief, high end television tax relief, animation tax relief and video games tax relief, children’s television tax relief and theatre tax relief for periods up to 2016/17. In the case of children’s television tax relief and theatre tax relief this is the first time that statistics have been published.
Film tax relief
This relief amounts to 25% of qualifying production expenditure and is available in the case of British qualifying films that have either passed a cultural test or are qualifying co-productions. The films are required to have minimum UK core expenditure of 10% and the tax relief is based on the lower of 80% of the core expenditure or the actual UK core expenditure.
The provisional statistics for 2016/17 show that 175 films completed in the UK claimed film tax relief with UK expenditure of almost GBP 1.0 billion. GBP 415 million tax relief was given in response to 630 claims. Since the relief was introduced in January 2007 2,070 films have been the subject of claims for tax relief and more than GBP 2.3 billion has been paid in film tax relief of which more than GBP 1.6 billion related to large budget films and GBP 630 million to limited budget films.
High end television tax relief
The high-end television (HETV) tax relief was first introduced on 1 April 2013 making available a tax deduction for qualifying companies. A claim for the relief can be made if the program passes a cultural test; is intended for broadcast; and is a drama, comedy or documentary. At least 10% of the production costs (25% before April 2015) must be related to activities in the UK; the average qualifying production costs per hour of production must be at least GBP 1 million per hour; and the slot length of the program must be more than thirty minutes.
In 2016/17 GBP 163 million HETV tax relief was given in response to 140 claims. The statistics show that GBP 374 million has been paid out in response to 360 claims since this measure was introduced.
Animation tax relief
This relief was introduced on 1 April 2013 and supports the production of culturally relevant animations in the UK. The measure allows for a tax deduction or a repayable tax credit for qualifying companies. A company qualifies for the relief if the animation passes the cultural test; is intended for broadcast; at least 51% of the core expenditure is on animation; and at least 10% of the production costs (25% before April 2015) relate to activities in the UK. Certain types of animations including advertisements or training productions are excluded from tax relief.
There were 20 animations completed in 2016/17 based on UK expenditure of GBP 38 million. A total of GBP 29 million tax relief has been paid in response to 145 claims for animation tax relief since the measure was introduced.
Video Games Tax Relief
Under video games tax relief (VGTR) 25% tax relief is granted on a maximum of 80% of the production budget of a qualifying video game. Relief is given for expenditure on goods or services used or consumed in the UK. In 2016/17 GBP 73 million was paid in VGTR in response to 280 claims for tax relief. Since VGTR was introduced in April 2014 295 video game productions have claimed relief based on expenditure of GBP 690 million.
Children’s Television Tax Relief
Children’s television tax relief is an extension of HETV and animation tax relief but is not subject to the GBP 1 million per program hour threshold or the 30 minute slot length that applies to high end TV programs. The relief can be claimed by a production company if it qualifies as British by passing the children’s television cultural test or by qualifying as a co-production; at least 10% of the core expenditure is UK expenditure; and the primary target audience of the program is children under the age of 15.
The relief was introduced in April 2015. Since that date a total of 35 claims for tax relief have been made, with tax relief of GBP 5 million paid out.
Theatre Tax Relief
Theatre tax relief was introduced on 1 September 2014. Relief may be claimed by a qualifying production company engaged in making a theatrical production if its focus is playing before a live audience of paying public or it has educational purposes; and it has a minimum 25% European Economic Area (EEA) expenditure. There are two rates of credit, 25% for touring productions and 20% for non-touring productions
Since the relief was introduced GBP 60 million has been paid in tax relief in relation to 1,750 productions. In 2016/17 GBP 46 million theatre tax relief was paid out in relation to 1,570 productions of which 490 were touring productions and 1,080 non-touring productions.