Creative Industry Tax Reliefs
Creative Sector Tax Relief and Expenditure Credits
Creative industries in the UK are in a fortunate position as they can reduce their corporation tax liability with the use of industry-specific tax reliefs. If that’s you, you’ll be able to reclaim costs of allowable expenditure, as well as any losses you incur over your tax year. You can also claim tax relief for various qualifying productions.
Your company can claim these reliefs if you pay corporation tax and are directly involved in the production of any ventures which fall under the following reliefs:
- Film Tax Relief (FTR)
- Animation Tax Relief (ATR)
- High-End Television Tax Relief (HTR)
- Children’s Television Tax Relief (CTR)
- Video Games Tax Relief (VGTR)
- Theatre Tax Relief (TTR)
- Museums and Galleries Exhibition Tax Relief (MGETR)
- Orchestra Tax Relief (OTR)
Before you apply, though, you may need to undergo a cultural test through the British Film Institute (BFI). At Artisan, we’ve helped countless companies go through the process of the BFI test and submit their following returns.
If successful, the BFI will issue you with an interim certificate of uncompleted work and a final certificate when the work is completed.
Currently, tax relief is available on 80% of the total core production costs carried out in the UK. We can advise you on the best ways to complete your project while receiving the maximum amount of relief.
Speak to our team of specialist creative industry accountants today to see how we can help you claim tax relief and reduce your costs.
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Our Creative Industry Tax Relief and Expenditure Credits Guide
Creative industry tax reliefs help qualifying companies maximise allowable expenditure. Understanding these tax reliefs ensures efficient financial planning and successful project completion. It is crucial to be aware of the qualifying expenditure incurred to claim various credits such as Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC).
Animation Tax Relief
Animation Tax Relief (ATR) supports UK animation programmes and films by allowing qualifying companies to claim a payable tax credit. For the 2024/25 tax year, companies can claim a tax credit worth 25% of the lower of either 80% of the total core expenditure or the actual UK core expenditure incurred. This ensures that animation productions benefit from significant tax savings, promoting continued investment in the UK’s creative industries.
Animation Tax Relief will be discontinued for all productions from 1 April 2027. However, you may be eligible for relief under the Audio-Visual Expenditure Credit scheme.
You cannot claim Animation Tax Relief for productions that do not begin principal photography by 31 March 2025. Instead, you may be able to claim an Audio-Visual Expenditure Credit.
Film Tax Relief
Film Tax Relief (FTR) provides financial aid to qualifying UK films. Eligible companies can claim a payable cash rebate of up to 25% on qualifying UK production expenditure, limited to 80% of the total core expenditure.
Children’s Television Tax Relief
Children’s Television Tax Relief (CTR) targets children’s programmes which are produced in the UK. Qualifying companies receive a tax credit, that offers up to 25% on the lower of 80% of total core expenditure or actual UK expenditure.
High-End Television Tax Relief
High-End Television Tax Relief (HETR) applies to high-budget TV productions in the UK. For the 2024/25 tax year, qualifying productions with budgets over £1 million per broadcast hour can claim a 25% tax relief on qualifying UK expenditure. This incentive is designed to support the production of high-quality television content within the UK, ensuring that significant investments in TV productions are economically viable and competitive on a global scale.
Museums and Galleries Exhibition Tax Relief
Museums and Galleries Exhibition Tax Relief (MGETR) supports public exhibitions. Organisations can claim a tax credit for up to 20% of the expenditure for non-touring exhibitions and 25% for touring exhibitions.
Orchestra Tax Relief
Orchestra Tax Relief (OTR) benefits orchestral productions. Eligible orchestras can claim a tax credit worth up to 25% of qualifying production costs, incentivising UK-based performances and global tours.
Theatre Tax Relief
Theatre Tax Relief (TTR) supports UK theatre productions. Eligible productions can claim a tax relief of up to 20% of qualifying expenditure for non-touring plays and 25% for touring productions.
Video Games Tax Relief
For the 2024/25 tax year, Video Games Tax Relief (VGTR) has been replaced by the Video Games Expenditure Credit (VGEC). This new scheme incentivises UK-based video game development by allowing qualifying companies to claim a payable tax credit. The VGEC offers a rate of 34% on 80% of the qualifying production expenditure. This aims to support the growth and innovation of the UK gaming industry, making the incentive more visible and beneficial for companies and investors.
Video games must qualify as British under the video games cultural test and are required to spend at least 10% of their core expenditure within the UK or the European Economic Area (EEA). This requirement helps strengthen and incentivise the UK and EEA video game development sector.
Minimum UK spend requirement
Creative industry projects, whether films, television programmes, animation, or video games, must meet specific UK spend requirements to qualify for tax reliefs. For any project to benefit from these tax reliefs, at least 10% of the total core expenditure must be spent on UK qualifying production activities. This expenditure encompasses a variety of production stages and associated costs. Additionally, companies can benefit from the Audio-Visual Expenditure Credit, which is part of the creative industry tax reliefs.
Qualifying UK Production Expenditure
UK qualifying production expenditure involves costs incurred during various production activities within the UK. These activities include:
- Pre-production: Engaging in scriptwriting, casting, and location scouting.
- Principal Photography: Conducting the main shooting phase of the film or programme.
- Animation: Creating animated sequences and characters.
- Shooting: Executing the planned scenes for live-action projects.
- Designing and Producing: Crafting sets, costumes, and props.
- Post-production: Editing, sound mixing, and special effects.
These costs contribute to meeting the 10% minimum spend requirement and are crucial for creative industry tax relief eligibility.
Making the most of Creative Industry Tax Reliefs
Taking advantage of Creative Industries Tax Reliefs can significantly enhance your company’s financial health. By understanding the various reliefs and credits available, such as the Audio-Visual Expenditure Credit and specific tax reliefs for film, television, animation, and more, you can effectively reduce your corporation tax liability and reclaim allowable expenditures.
At Artisan, we specialise in guiding companies through the complexities of these reliefs, ensuring you maximise your eligible claims and benefit from substantial savings. Need assistance? Reach out to us today.
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