To support the vibrant sector that is the creative industry, the Government offers an array of tax reliefs and expenditure credits.
If you are a company in the creative industry, here is how you can tap into these incentives.
What are creative industry tax reliefs?
Creative industry tax reliefs are designed to reduce your Corporation Tax liability or even provide a payable tax credit for qualifying companies.
These reliefs are available for businesses involved in producing films, television, video games, theatrical productions, and more.
The benefits include:
- Increasing the amount of allowable expenditure
- Reducing the amount of Corporation Tax payable
- Surrendering losses for a payable tax credit
What reliefs can you claim?
Depending on your business’s focus, you might be eligible for one or more of the following:
- 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)
- Orchestra Tax Relief (OTR)
- Museums and Galleries Exhibition Tax Relief (MGETR)
What about expenditure credits?
As of 1 April 2024, certain tax reliefs transitioned into expenditure credits. These include:
- Audio-Visual Expenditure Credit (AVEC)
- Video Games Expenditure Credit (VGEC)
These credits provide a taxable amount based on allowable expenditure, which can offset your Corporation Tax liability. Any remaining amount may even be refunded as a payable credit.
Who can claim?
To qualify for these reliefs, your company must:
- Be liable for Corporation Tax
- Be directly involved in the production and development of qualifying projects, such as films, video games, or exhibitions
- Hold responsibility throughout the project, from pre-production to completion
- Actively make decisions, negotiate contracts, and manage finances
For theatrical productions, orchestral concerts, or exhibitions, your company must oversee everything from production to closure.
Cultural certification
For tax reliefs tied to films, TV, and video games, your work must be certified as British.
This can be done through a cultural test or an internationally recognised co-production treaty.
Certification is managed by the British Film Institute (BFI), which can issue interim certificates for works in progress or final certificates for completed productions.
Additional information form requirement
All claims for creative industry tax reliefs made on or after 1 April 2024 must include an additional information form.
This document is required to provide evidence to support your claim, ensuring compliance and transparency.
When to submit your claim
Timing is crucial when making a claim. You should submit your claim for creative industry tax relief within:
- Two years from the end of your accounting period, or;
- 42 months from the start of your accounting period if it lasts longer than 18 months
Your additional information form and all supporting evidence must be submitted before or on the same day as your Company Tax Return.
Late submissions could result in delays or invalidation of your claim.
Remember, you will need to submit a separate form for each accounting period for which you are claiming relief.
What information do you need to provide?
To complete the additional information form, you must include your:
- VAT registration number
- PAYE reference number
- Foreign Entertainer’s Unit (FEU) reference number (if applicable)
Production information
For each production, include:
- Project or production name – If it differs from the British Film Institute (BFI) certificate, explain why
- Start date of pre-production or development
- Production status – Whether it is ongoing, complete, or abandoned
Specific requirements for different types of claims
- Film, TV, or video games – Attach a digital version of the BFI certificate and provide the Department for Digital, Culture, Media and Sport (DCMS) reference number.
- Theatre, orchestra, museum, or gallery productions – Include the production start date and opening night or first public performance date (planned dates if still ongoing). For touring productions, list:
- Number of performances
- Dates and locations for each performance
- Orchestral productions – If applicable, disclose details of concert series elections previously submitted.
Expenditure details
For expenditure details, you will need to outline:
- Total expenditure and core costs for all productions
- Amount of credit, additional deduction, or loss surrendered for each relief. Hm Revenue & Customs (HMRC) also provides templates within the form to help you organise this data accurately.
Connected party transactions
If your claim involves connected party transactions, you must disclose:
- Total number of connected parties
- Combined value of all transactions
For each transaction, provide:
- Name of the connected party
- Date and amount of expenditure
- Description of goods or services provided
What if you need to amend your claim?
If amendments are necessary:
- Submit a new form for the same accounting period.
- Re-submit your Company Tax Return, even if it doesn’t require other amendments.
Amendments cannot be made directly to a submitted form, so double-check all details before submission.
Contact us today with help and advice regarding tax reliefs for your creative industry business or if you require assistance with submissions.
