5 Creative Tax Reliefs

The Creative Industries have done rather well in the last couple of years as far as tax reliefs go and more are just about to come on stream.

Creative industry tax reliefs (CITR) are a group of 5 Corporation Tax reliefs that allow qualifying companies to claim a larger deduction, or in some circumstances claim a payable tax credit when calculating their taxable profits.

These reliefs work by increasing the amount of allowable expenditure. Where your company makes a loss, you may be able to ‘surrender’ the loss and convert some or all of it into a payable tax credit.

Film Tax Relief (FTR) was introduced in April 2007 and 2 additional reliefs were introduced in April 2013. These are Animation Tax Relief (ATR) and High-end Television Tax Relief (HTR). A fourth relief for Video Games Development was introduced from 1 April 2014. A fifth relief for Theatre Tax Relief is to be introduced in Autumn 2014. HMRC

Let’s take a look at the 5 tax reliefs:

Film Tax Relief (FTR)

Your company will be entitled to claim FTR on a film as long as:

• the film passes the culture test – it is considered a ‘British film’
• the film is intended for theatrical release
• at least 25% of the total production costs relate to activities in the UK

Animation Tax Relief (ATR)

Your company will be entitled to claim ATR on an animation programme if:

• the programme passes the cultural test – a similar test to that for FTR but within the European Economic Area
• the programme is intended for broadcast
• at least 51% of the total core expenditure is on animation
• at least 25% of the total production costs relate to activities in the UK

High-end Television Tax Relief (HTR)

Your company will be entitled to claim HTR on a programme if:

• the programme passes the cultural test – a similar test to that for FTR but within the European Economic Area
• the programme is intended for broadcast
• the programme is a drama, comedy or documentary
• at least 25% of the total production costs relate to activities in the UK
• the average qualifying production costs per hour of production length is not less than £1million per hour
• the slot length in relation to the programme must be greater than 30 minutes

Video Games Development

Your company will be entitled to claim VGTR as long as:

• the video game is British
• the video game is intended for supply
• at least 25% of core expenditure is incurred on goods or services that are provided from within in the European Economic Area (EEA)

Theatre Tax Relief

Details to follow in the Autumn of 2014

 

steve@bicknells.net