Government gives £1.1bn tax relief to film, TV and creative industries

A total of £1.1bn was paid out in creative industries tax reliefs in 2018-19, a 22% increase on the previous year’s figure of £900m 

Last year, the government reported that it had paid out £850m but this figure was later revised upwards in light of claims made after the data had been analysed.

The various creative industries tax reliefs can be claimed for the production costs related to film, high-end TV, animation, video games, children’s TV, theatre, orchestra and museums and galleries. To qualify for the relief, the production must demonstrate it is a ‘British production’ and that at least 10% of the production costs were spent in the UK.

Notable beneficiaries included the TV series Killing Eve and the film Phantom Thread with a production budget of £35m.

The amount of film and high-end TV tax relief has been growing quickly in recent years, rising by around 40% between 2016-17 and 2018-19, according to an HMRC report.

There were 705 films in various stages of production which made claims in 2018-19, of which 245 were completed. Productions can claim relief at various stages of production and each film may make more than one claim during the years it takes to make. During the year, £595m in relief was paid in response to 790 claims. Some 245 films were completed, representing UK expenditure on film production services of £1.9bn.

Since the relief was introduced in 2007, 2,955 films have used the reliefs, representing £15.2bn in expenditure, with £3.3bn being paid out by the government in tax claims.

Expenditure and tax reliefs on high-end TV was less than half that of film. There were 90 high-end TV programmes completed in the year which claimed the relief, representing UK expenditure of £839m. In 2018-19, £246m of TV relief was paid on 220 claims representing 210 programmes in production.

In all, since 2007 HMRC has paid out £821m for 770 high-end TV claims.

Other creative sectors had significantly smaller expenditures, with animation productions claiming £16m for 90 claims, video games getting £103m for 535 games, children’s TV claiming £16m for 55 programmes in production, theatres asking for £78m for 930 claims, orchestras being paid £16m for 120 claims against 555 productions and museums and galleries being paid £4m for 50 claims representing 300 exhibitions.

Matt Appleton, RSM’s national creative sector tax relief lead, said: ‘These reliefs offer amazing benefits to companies and charities. It is clear more is being claimed now than ever before – but there are still many potential claimants who have not yet made claims and are missing out. In addition, there are many actual claimants who are not maximising the benefit from claims made, and in turn not making the most of these tax benefits which can free up cash to reinvest.’

Jesse Norman, financial secretary to the Treasury, said, ‘The arts and creative industries make a vital contribution to the UK economy. These tax reliefs have helped support some astonishing and exciting work again this year, celebrating the very best of British culture.’

Amanda Nevill, CEO at the British Film Institute (BFI), which administers cultural tests for the screen sector tax reliefs, said, ‘The BFI’s Screen Business report “How screen tax reliefs power economic growth across the UK” demonstrated how they are helping to drive one of our fastest-growing sectors, creating jobs across the UK, investment in innovation and delivering a strong return on investment to the UK economy with close to £8 billion spent annually on production.’

HMRC: Creative Industries Statistics August 2019

Tom Reeve | 08-08-2019

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