UK's Creative Industry Tax Overhaul: A New Era for Film, TV, and Video Games
Updated Tax Incentives for UK Industries: Groundbreaking Tax Reliefs Introduced for Film, Television, and Video Game Sectors
The UK government is shaking things up in the film, TV, and video games industry with the introduction of the Audio-Visual Expenditure Credit (AVEC) and the Video Games Expenditure Credit (VGEC), replacing the existing tax reliefs. These changes, set to take effect from January 1, 2024, will inject some fresh energy into the creative sector.
The Shift from Reliefs to Expenditure Credits
- The AVEC will supplant the current tax reliefs for film, high-end TV, animation, and children's TV.
- The VGEC will replace the Video Games Tax Relief (VGTR).
Updated Rates
- Film, high-end TV, and video games: A whopping 34% taxable credit (previously 25.5%).
- Children's TV, animated TV, and animated film: An impressive 39% taxable credit (previously 29.25%).
Key Dates
- From January 1, 2024: Claim expenditure credits.
- From April 1, 2025: New productions mustClaim under the new credits.
- From April 1, 2027: Ditch those old reliefs, as all productions must now claim under the new expenditure credits—the end of an era!
Claiming AVEC and VGEC
Film Tax Relief
To access film tax relief, the production must:
- Pass the cultural test or qualify as an official co-production.
- Be destined for the big screen.
- Have a minimum UK core spend requirement of 10%.
TV and Animation Tax Reliefs
Claim relief on the lower of 80% of total core expenditure or actual UK core expenditure, with no cap on claims. Check requirements for high-end TV, animation, and children's TV productions in the enrichment data.
Video Games Tax Relief
Claim relief on the lower of 80% of total core expenditure or actual UK/EEA core expenditure, with no cap on claims.
- Qualify as British under the cultural test.
- Intended for release.
- 25% of core expenditure in the UK/EEA.
- Developed by a UK Corporation Tax net company.
Minimum UK Spend Requirement
- Films, high-end TV, animation, and children's TV: Abide by the 10% minimum UK core spend requirement.
- Video games: Make sure 25% of production costs are spent on UK or EEA qualifying expenditure.
Definition of UK Qualifying Expenditure
The UK qualifying expenditure includes all production activities in the UK, irrespective of the nationality of personnel.
Help and Resources
For queries on eligibility and claims, connect with the HMRC Creative Industry Tax Unit at [email protected] or call 0300 123 3440 (option 3).
Check out: https://www.bfi.org.uk/apply-british-certification-tax-relief/about-uk-creative-industry-tax-reliefs
Join the ranks of streamers, financiers, production houses, and service providers today!
Upon the implementation of the Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC) from January 1, 2024, the UK's creative sector, including film, TV, and video games, will witness a significant shift in finance, with the new credits offering enhanced taxable credits of up to 39%. As these credits replace the existing tax reliefs, they're anticipated to revolutionize the landscape of the creative lifestyle.
Concurrently, technology is expected to play a pivotal role in shaping this new era, as the industry adapts and adopts advanced digital tools to qualify and claim these expenditure credits. On the other hand, the sports sector and weather forecasts may not seem directly related, but can indirectly impact production schedules and budgets in the creative industry, adding another layer of variables to navigate.
