TV, film and video game production companies are set to benefit from an expansion of tax reliefs for the creative sector
From 1 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. Warner Brothers Studios plans to expand the Hertfordshire studio, creating a further 4,000 jobs and providing £200m to the economy.
In the last four years, Netflix has invested £4.8bn into the UK creative economy, year on year the total investment has increased by 50%.
The credit will be calculated off 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 a 5.5% rise on the previous rate. This is a significantly higher increase than that of the film, high end TV and video game sector, which 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 reform was announced in the Chancellor’s 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.
‘The UK is a world leader in creativity, and we want to ensure that continues well into the future by making it easier for British film, TV and video games to thrive.’
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.