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Insight

Audio-visual tax reliefs: consultation

Tim Johnson
29/11/2022

Locations

United Kingdom

The Government has launched a consultation in relation to UK audio-visual tax reliefs (commonly referred to in the audiovisual sector as the "UK tax credits").

Highlights of areas upon which the Government is seeking feedback include the following:
 
- merging the existing tax reliefs for film, high end TV, animation, children's TV and videogames (there are currently separate regimes for each, but with significant overlap);
 
- increasing the minimum budget level for high end television tax relief (currently this is set at £1 million per one hour slot length) and reducing (or removing) the minimum slot length (currently this is set at 30 minutes) as well as clarifying that this applies on a per episode basis;
 
- removing the cap on qualifying expenditure (this is currently set at 80% - so effectively the maximum tax credit is 25% of 805, or 20% of 100%), but coupled with a reduction in the value of the credit (down from 25%);
 
- removing the eligibility of European expenditure for videogames (which differs from film and TV, where the eligible expenditure must be used or consumed in the UK) to bring videogames in line with film and TV; and
 
- switching from a system of tax reliefs (with the right to surrender in return for a cash payment) to a system of expenditure credits.
 
The consultation runs until 9 February 2023 with a view to reforms being implemented in Spring 2024.
 

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Areas of Expertise

Tax and Structuring

Related Work Areas

Media