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Record Demand For UK's Tax Breaks For Creative Industries

by Jason Gorringe, Tax-News.com, London

20 July 2017


New figures published by HM Revenue and Customs reveal that the number of claims for Film Tax Relief (FTR) reached a record high in 2016-17.

Film companies made 630 claims for FTR in 2016-17, up from 535 in the previous year. In total, HMRC paid out GBP415m (USD538m) to the UK film industry, a 23 percent rise from 2015-16.

Film tax relief allows qualifying companies to make a deduction in their taxable profits, and those which don't make a profit can surrender the tax relief for a payable tax credit. In order to qualify, films must either pass a cultural test or be a qualifying co-production. At least 10 percent of the total production costs must relate to activities in the UK.

Since FTR was introduced in 2007, GBP2.3bn has been paid out to meet FTR claims, of which over GBP1.6bn were claims paid to large-budget films and over GBP630m to limited-budget films. In total there were 175 films completed in the UK in 2016-17 which claimed FTR.

The figures also included details of tax reliefs claimed by other creative industry sectors including high-end television (HETV), animation and video games. Details on the claims for children's television and theater tax relief were also included for the first time. Since 2015, 30 programs have claimed children's television tax relief resulting in payouts of GBP5m. In 2016-17, GBP46m of theater tax relief was paid out relating to 1,570 productions of which 490 were touring and 1,080 were non-touring.

Dan Robertson, a tax partner in RSM's technology, media, and telecoms team, said: "The UK already has a thriving creative industry sector and it's clear that these tax reliefs are proving ever more popular. We've recently seen a number of Hollywood blockbusters being filmed in UK studios, which suggests that an increasing number of film-makers are recognizing the attractiveness of the UK as a place to make films."

"However, in times of public spending pressure, these tax reliefs can always be under review. It is to be hoped that the Government recognizes the value of these reliefs, and the economic benefits that they bring."

TAGS: tax | budget | United Kingdom | telecoms | Tax

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