Creative Tax Relief Increased

Creative Tax Relief Increased

TV, film and video game production companies are set to benefit from an expansion of tax reliefs for the creative sector, with effect from January 2024, children’s TV, animated TV and animated film production will be able to claim an extra £42,500, while high-end TV, film and video game producers will be eligible for an additional £5,000 in relief, assuming the production has £1m of qualifying expenditure.

The Treasury said the investment will spark investment in creative industries, with Warner Brothers Studios planning to expand their Hertfordshire studio to create up to 4,000 jobs.

The credit will be calculated using the production’s qualifying expenditure, rather than an adjustment to the company’s taxable profit.

Children’s TV as well as animated shows will receive the highest rate of credit at 39%, this is 5.5% higher than the previous rate. This is a higher increase than that of film, high end TV and video game sector, which only rose by 0.5% to 34%.

Due to companies needing time to adjust to the reforms, the government confirmed that projects in development on 1 April 2025 will be able to continue using the previous relief system until 1 April 2027, when the old rates will expire. 

This change was announced in the Spring Budget in 2023 with draft legislation published last July.

Nigel Huddlestone, financial secretary to the Treasury said: ‘We are backing the makers of the next Barbie, Happy Valley and Grand Theft Auto with this new, more generous, tax credit system for British production talent.

At the 2023 Budget the rates of tax relief for theatre, orchestra and museums were also extended until 2025.

Tax credits for the previous financial year were worth £1.66bn to the creative sector which was a 56% increase from the year before.