Film tax relief payouts increase by a third

Tax relief payouts for film schemes has increased by 30% as well as other fluctuations to high-end television (HETV), animation, and video games for years up to 2015-16, according to statistics from HMRC

Since January 2007, when the current film tax relief was introduced, over £1.8bn has been paid out to meet 3,175 claims.

In 2015-16, £338m was paid in response to 530 claims which averages out at about £638,000 per claim. This is up by £79m (30%) on the previous year where £259m was paid.  

From 2007-2016 £1.3bn tax credit claims were paid on 355 claims to large budget films and £540m was paid on 2,820 claims to limited budget films.

Almost 60 large budget films claimed a total of £256m and 470 limited budget films claimed almost £83m in 2015-16.

People are exploiting film tax reliefs by participating in tax avoidance schemes for example, Little Wing film who abused the film tax relief in an attempt to steal £100m.

HETV tax relief has paid, on average, £923,000 per claim since it was introduced in 2013.

In 2015-16 £96m was paid out on 115 claims which is a decrease of £1.7m (2%) on the previous year where £98m was paid out in response to 90 claims.

Animation tax relief (ATR) was introduced in April 2013 with almost £19m being paid on 100 claims.

In 2015-2016 £12.9m was paid on 65 reliefs which was a significant increase on the previous year where only £4.6m was paid showing an increase of £8.3m (36%).

In the first full year of tax relief on video games, a total of £45m was paid to developers, an average of £346,000 per claim.

Richard Heap, a partner at RSM who specialises in technology, media and telecommunications said: ‘The recent launch of Pokémon Go, and the consequent doubling of the Nintendo share price in Japan, is a further reminder of the global importance of the video games industry which is now worth around $100bn a year.

‘Following the Brexit vote and the change in government ministerial responsibilities, the industry will no doubt be lobbying hard to ensure that this important relief remains in place for the future.’

HMRC have recently introduced tax reliefs for the theatre industry which was available from September 2014. As well as this a consultation into the tax relief for temporary and touring exhibition costs will be launched this summer.

HMRC’s Creative Industries Statistics, July 2016 is here. 

Amy Austin |Reporter, Accountancy Daily [2016-2019]

Amy Austin was reporter, Accountancy Daily and Accountancy magazine, published by ...

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