Creative industries tax reliefs incentives
Although Research and Development tax relief is by far the most common and widely used tax relief in operation there are other reliefs available to companies in creative sectors:
- Film Tax Relief
- High-end Television Tax Relief
- Children’s Television Tax Relief
- Animation Television Tax Relief
- Video Games Tax Relief
- Museums and Galleries Exhibitions Tax Relief
- Theatrical productions Tax Relief
- Orchestral Concerts Tax Relief
The benefit
The available tax relief is based on cap. This is the lower of:
- 80% of core expenditure, and
- Core costs incurred in the UK or the European Economic Area (EEA (this depends on the creative relief being claimed).
Eligible companies must demonstrate that a minimum proportion of their expenditure was incurred within a particular geographic area. This is typically at least 25% of core expenditure incurred in the EEA or at least 10% incurred in the UK.
Example of creative industries tax relief available:
A qualifying museum incurs £100,000 of qualifying core expenditure in respect of Museum and Galleries Exhibitions tax relief. Of this £60,000 was incurred in the EEA.
The available deduction is the lower of:
- £100,000 * 80% = £80,000, or
- £60,000
£60,000 is therefore the additional deduction.
After assessing the exhibitions relevant income and expenditure it makes a loss of £150,000.
Losses that can be surrendered for cash but there is a cap. The surrenderable amount is the additional deduction.
£60,000 * 20% (non-touring tax credit rate) = £12,000 repayable
Who can claim creative industries tax relief?
To be eligible for one of these tax reliefs a company must, in the first instance, be liable to UK corporation tax.
After which a company must then demonstrate that it is:
- Directly involved in production and development work
- The company is involved with the decision-making process, and
- Directly negotiates, contracts, and pays for rights, goods, and services
Every qualifying production, exhibition, game or concert identified is treated as though it’s a separate trade.
How can we help?
Our team of qualified and highly experienced tax advisers can support and assist you in:
- Determining whether your company can qualify for the relief
- Maximising and quantifying your claim, including a review of previous claims in time to be refiled
- Building close working relationships with your finance and technical teams
- Preparing robust supporting evidence and reports to support your claim
- Submitting your claim in current or amended corporation tax returns
Call NOW to speak to one of our Tax Consultancy advisers
Call: 0808 144 5575
