On 29 August 2024 HMRC published updated statistics for creative industries tax relief for 2022/23.
The statistics relate to the period before the introduction of the new Audio-Visual Expenditure Credit (AVEC) which replaced the current Film, High-end TV, Animation and Children’s TV Tax Reliefs for claims from 1 January 2024, and the Video Games Expenditure Credit (VGEC) which replaced the Video Games Tax Relief (VGTR).
The statistics for 2022/23 show that GBP 2.2 billion was paid out in tax relief for creative industries in the year. The increase was due mainly to rises in the amount of high-end television (HETV) tax relief and Theatre tax Relief given in the year. In 2022/2023 the amount of HETV tax relief represented 50% of the total amount of creative industries tax relief given and film tax relief accounted for 25% of the total relief.
Film tax relief
Under film tax relief (FTR) companies can make a deduction from taxable profits or surrender a loss to receive payment of a tax credit. The relief is available on 25% of the qualifying production expenditure and is available for British qualifying films that have either passed a cultural test or are qualifying co-productions, subject to certain conditions. In 2022/23, a total of GBP 553 million of FTR was granted in relation to 895 claims, an increase of 6% on the previous year. Claims for FTR were still below pre-pandemic levels, partly due to an increase in the number of films produced for streaming services, as these often claim HETV relief rather than FTR.
High End Television Tax Relief
The high-end television (HETV) tax relief makes available a tax deduction for qualifying companies. A claim can be made if the programme passes a cultural test; is intended for broadcast; and is a drama, comedy or documentary, subject to certain conditions. In 2022/23, GBP 1,107 million of HETV tax relief was paid in response to 615 claims. This was an increase of 13% over the previous year, due to an increase in high-budget productions.
Animation Tax Relief
Animation tax relief (ATR) supports the production of culturally relevant animations in the UK and allows a tax deduction or a repayable tax credit for qualifying companies. A company must qualify under a cultural test and certain other criteria. In 2022/23, GBP 26 million of ATR was paid in relation to 95 claims for relief.
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. A company can make a number of claims for tax relief during the production process and a claim for relief may cover a number of video games. In 2022/23, GBP 282 million of VGTR was given in relation to 525 claims.
Children’s Television Tax Relief
Children’s television tax relief (CTR) is generally similar to HETV and animation tax relief, and claimants are subject to a cultural test and other conditions. In 2022/23, GBP 27 million of CTR was paid in response to 70 claims for relief.
Theatre Tax Relief
Theatre tax relief (TTR) may be claimed by a qualifying production company playing before live paying audiences or with educational purposes, subject to certain conditions. In 2022/23 GBP 178 million of TTR was paid in response to 1230 claims.
Orchestra tax relief
Orchestra tax relief (OTR) is available for a qualifying orchestral production company putting on a qualifying orchestral concert (with at least 12 instrumentalists). In 2022/23 GBP 33 million of OTR was paid in response to 220 claims.
Museums and Galleries Exhibition tax relief
Museums and galleries exhibition tax relief (MGETR) is available to charitable companies, subsidiaries of charities and local authorities. Tax credits are restricted to a maximum per exhibition of GBP 100,000 (touring) or GBP 80,000 (non-touring). In 2022/23 a total of GBP 29 million of MGETR was paid in response to 330 claims for relief. This is a large increase on the previous year, partly due to an increase in rates of relief.