The UK has published statistics relating to the claims made for creative industry tax relief. The statistics include data for the film tax relief, high end television tax relief and animation tax relief for periods to April 2015. In the case of high end television tax relief and animation tax relief this is the first time that statistics have been published. Some of the published figures are still provisional and may be amended at a later date.
The statistics are compiled by HMRC’s specialist films unit and from certification data supplied for the Department for Culture, Media and Sport by the British Film Institute. It should be noted that as claims can be made during production, on the basis that the production has secured at least an interim certificate, a production may make two or more claims for tax relief, including one or more interim claims and a final claim on completion of the work.
Film tax relief
Film tax relief is an additional deduction for 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 a minimum UK core spend of 10% and the tax relief is based on the lower of 80% of the core expenditure or the actual UK core expenditure. There is also a provision for loss-making companies to surrender the tax relief for a payable tax credit. This relief was introduced in its current form in 2007.
The provisional statistics for 2014/15 show that more than GBP 250 million was given in film tax relief by the UK government. Since the relief was introduced in January 2007 2,615 claims for film tax relief have been made. Almost GBP 1.5 billion has been paid in tax relief of which GBP 1 billion related to large budget films and GBP 450 million to limited budget films.
High end television tax relief
High-end television (HETV) tax relief was introduced on 1 April 2013 and allows 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. The television company responsible for the program must be within the UK corporation tax net.
The tax relief cannot be claimed for a program if it is an advertisement; news, current affairs or discussion program; quiz, panel or game show; competition or contest; live event broadcast (including theater) or training production.
HETV relief also has a provision for loss-making companies to surrender the relief for a payable tax credit. The statistics show that GBP 91.6 million has been paid out in tax relief since the measure was introduced. A total of 125 claims to HETV tax relief have been made, resulting in payment of relief in relation to 95 of those claims.
Animation tax relief
Animation tax relief was also 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 such as advertisements or training productions are excluded from tax relief.
The statistics show that 35 claims have been made for tax relief since the measure was introduced and from the total claims for GBP 10.2 million of relief a total of GBP 5.4 million has been paid in tax relief.
