Over £1bn of tax reliefs for creative sector

HMRC statistics reveal a total of £1.11bn was paid out in tax reliefs in 2019/20 for the creative sector, up by £30m on the previous year   

Creative sector reliefs are designed to encourage more investment into cultural activity across the UK.  These sectors include film, both high end (dramas, documentaries) and children’s programmes, animation, video games, theatre, orchestras and museums/galleries.

In 2019/20 film tax relief (FTR) accounted for almost half of the total amount paid out, and high-end TV (HETV) tax relief accounted for almost 30%.

There were 300 British films completed in 2019/20 which claimed FTR, with UK expenditure of £2.5bn. A total of £522mn of FTR was paid in response to 785 claims, representing 740 films.

The majority of claims made are for smaller amounts, with 66% of all claims being for £100,000 or less, on a rising trend since 2018/19. Despite only 2% of the claims being for over £5m in 2019/20, they accounted for 66% of the total amount paid.

Each film, programme, animation or videogame may make several claims during the production process. One claim can also be made to cover several productions.

There were 110 British programmes completed in 2019/20 which claimed HETV tax relief, with UK expenditure of £1.5bn, and £324m was paid to 290 claims, representing 275 programmes.

In addition, 35 British animations completed in 2019-20 claimed animation tax relief (ATR),  and £18m was paid to 105 claims, representing 115 animations.

Over the year, 150 British video games were completed and claimed video games tax relief (VGTR), with UK expenditure of £355m. In 2019/20, 350 claims were made for a total of £121m, which represented 605 games.

There were 25 British children’s TV programmes completed in 2019/20 and claiming relief, with UK expenditure of £30m. In 2019/20, 55 claims were made for a total of £24m, which represented 90 programmes.

The year also saw £71m of theatre tax relief paid out relating to 1,115 claims, £18m of orchestra tax relief, and £16m of museum and galleries exhibition tax relief.

 Stephen Bristow, a partner in Saffery Champness’ film and TV team, said: ‘UK film and television is an international success story, employing over 125,000 full time earners. Film and HETV production spend has doubled in the past five years to reach more than £3.6bn in 2019.

‘This extraordinary growth has been fuelled by the government’s investment in the creative sector tax reliefs and it is very pleasing to see, yet again, record figures for that commitment published today. ‘This is good news because for every £1 investment by the government in FTR, £7.69 of GVA is generated. For HETV that figure is £6.10 of GVA for every £1 spent by the government.

‘The film and television sector has a vital role to play in the recovery of the UK’s economy post-Covid-19.

‘The benefits of the production boom flow downstream to a multitude of other businesses and support functions – post-production houses, advertising, merchandising, hotel, travel and local transport and infrastructure in production locations – which all provide employment opportunities.’

Commenting on the figures, Matt Appleton, RSM’s national lead on creative sector tax reliefs, said: ‘In these challenging times, it is so good to see that this tax relief is being claimed.  Now, more than ever, our creative sectors need as much help as possible.  

'Where no claims have been made before, I would urge all companies and charities in these fields to consider claiming.  Even where claims have been made, I would strongly recommend revisiting these, as there is often scope for significantly increasing original claims.’

HMRC Creative Industries Statistics

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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