Published 16/02/2023
Modified 16/02/2023
7 min read

The UK’s Creative Industries Tax Reliefs

The Creative Industries Tax Relief Scheme is a set of tax incentives designed to support and encourage the growth of the UK’s creative industries sector.

The UK’s Creative Industries Tax Reliefs

An Overview

The UK’s creative industries are a vital part of the country’s economy, contributing billions of pounds annually. From film and television to video games, animation and theatre, these industries provide jobs and opportunities for many talented individuals and, to support this thriving sector, the UK Government has introduced the Creative Industries Tax Relief Scheme.

Creative Industries Tax Relief, The UK’s Creative Industries Tax Reliefs, Innovation Tax

What is the Creative Industries Tax Relief Scheme?

The Creative Industries Tax Relief Scheme is a set of tax incentives designed to support and encourage the growth of the UK’s creative industries. These tax reliefs include Film Tax Relief, High-end Television Tax Relief, Video Games Tax Relief, Animation Tax Relief, Children’s Television Tax Relief, Orchestra Tax Relief, Museums and Galleries Exhibition Tax Relief and the Theatre Tax Relief.

What are the Eligibility Criteria for the Creative Industries Tax Relief Scheme?

To be eligible for the Creative Industries Tax Relief Scheme, a project must meet certain criteria, for example, passing a cultural test or having incurred at least 25% of the core expenditure on the goods and services provided from within the European Economic Area (EEA).

In most cases, businesses can claim a reduction in Corporation Tax which will be the lower of either:

  • 80% of total core costs
  • the amount of UK core costs

For loss making companies, qualifying losses can be surrendered for a payable tax credit at a rate of 25%, except Theatre and Museums and Galleries Exhibition Tax Reliefs which are usually 20% (unless classed at ‘touring’ production, in which case the rate reverts to 25%).

The Film Tax Relief scheme offers a tax benefit of up to 25% on qualifying production expenditure for films intended for theatrical release or certain other forms of distribution.

The High-end Television Tax Relief scheme offers a tax benefit of up to 25% on qualifying production expenditure for programmes intended for broadcast on television and where the average core costs are at least £1 million per hour of slot length which is greater than 30 minutes.

The Children’s Television Tax Relief scheme offers a tax benefit of up to 25% on qualifying production expenditure for programmes intended for broadcast on television (includes streaming online) which are primarily intended for children under the age of 15.

The Animation Tax Relief scheme offers a tax benefit of up to 25% on qualifying production expenditure for animated programs intended for broadcast, including streaming online. To qualify, the production must be certified as British by the British Film Institute, pass a cultural test and incur at least 25% of its ‘core costs’ on goods or services provided from within the UK or European Economic Area (EEA)

The Video Games Tax Relief scheme offers a tax credit of up to 25% on qualifying production expenditure for video games intended for release to the general public. To qualify, the production company must be UK-based, and incur at least 25% of its ‘core costs’ on goods or services provided from within the UK or European Economic Area (EEA)

The Theatre Tax Relief scheme offers a tax credit of up to 25% on qualifying production expenditure for theatrical productions intended for public performance in the UK.

The Orchestra Tax Relief scheme offers a tax credit of up to 25% on qualifying production expenditure for orchestral concerts intended for public performance in the UK and consist of a minimum of 12 instrumentalists.

The Museums and Galleries Exhibition Tax Relief scheme offers a tax credit of up to 25% on qualifying production expenditure for exhibitions in public institutions, such as museums and galleries. The claimant company needs to be a charity, or a company wholly owned by a charity or local authority.

What is the Average Relief Claimed?

The average value of relief claimed for each of the Creative Industries Tax Reliefs can vary depending on the size and scope of the project, as well as the specific relief being claimed.

Typically businesses can claim tax relief of up to 25% on either 80% of the total core production and development expenditure incurred or the actual UK core production and development expenditure incurred, whichever is lower. The amount you can claim is not capped.

According to the latest HMRC statistics on Creative Tax Reliefs, the average claim is £429,568.79.

Table 1: Number of projects, claims and amount of creative industries tax relief paid out (£ million) in 2021-22

Relief Number of projects Number of claims Amount of relief paid % of relief claimed

Film

715

720

362

35%

High-End TV

355

370

397

38%

Animation

85

80

17

2%

Video Games

580
330
197
19%

Children’s TV

85
70
16
2%

Theatre

2,055
620
38
4%

Orchestra

510

100

10

1%

Museum

1060

145

9

1%

Total

5,445

2,435

1,046

100%

The number of projects refers to the number of films, programmes, games, productions or exhibitions.

Why Should You Consider the Creative Industries Tax Relief Scheme?

The Creative Industries Tax Relief Scheme provides valuable support and incentives for businesses involved in the UK’s creative industries and, by taking advantage of these reliefs, you can reduce your tax bill, helping to ensure the success and growth of your creative enterprise.

Whether you are producing a film, developing a video game, creating an animated project or putting on a theatrical production, the Creative Industries Tax Relief Scheme can provide the financial support you need to bring your vision to life.

In conclusion, the UK’s Creative Industries Tax Relief Scheme is a valuable incentive for anyone involved in the country’s creative industries. By understanding the eligibility criteria and taking advantage of the reliefs available, you can ensure the success and growth of your creative enterprise. If you have any questions about the scheme, please contact a member of our Creative Tax Relief team on 0203 813 4600 or email your query to info@innovationtax.co.uk.

HOW CAN WE HELP?

At Innovation Tax, we dedicate time to our clients and partners to inform them of changes and new developments which may be of interest and go over and above expectation to demonstrate that we are not just R&D Tax experts.

Start the conversation with a complimentary, no-obligation chat about your R&D work.

Innovation Tax specialise in helping companies access vital innovation tax incentives and grant funding to enable their businesses to grow, increase profitability, reduce risk and enable further investment in R&D, IP and capital assets.

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