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Further creative industry tax credits announced in Chancellor's Autumn Statement



United Kingdom

In the Autumn Statement delivered on 3 December 2014, Chancellor George Osborne announced that as part of the Finance Bill 2015 the government will introduce corporation tax relief for the...

In the Autumn Statement delivered on 3 December 2014, Chancellor George Osborne announced that as part of the Finance Bill 2015 the government will introduce corporation tax relief for the production of children's television programmes with effect from 1 April 2015. New relief will be at a rate of 25% on qualifying UK core expenditure incurred on or after 1 April 2015 up to a maximum of 80% of the total core expenditure.

This announcement is the latest in a succession of tax reliefs for the creative industries following relief for high-end television and animation in April 2013, video games in April 2014 and for theatre productions in September 2014. 

This development is welcome news to the industry since Pact (the trade body representing UK production companies) has been lobbying for it. From research Pact has undertaken, they estimate the public purse could receive up to £3m per year from the economic activity generated by this new relief and encourage investment from international broadcasters such as Disney and Viacom, as well as new players such as Netflix and Amazon. Pact also anticipate the relief will drive further growth in exports and revenues through a more competitive domestic production market; provide stable employment for a significant number of people; and enrich British content for British children that informs, educates and entertains.

Pact claim that the animation tax credit has attracted £52m on spend in its first year so hope this development for live-action children's productions will continue to enhance the investment in and quality of British children's programming.

The government also announced in the Autumn Statement plans to consult with the television industry on a possible reduction of the minimum UK expenditure for high-end TV relief from 25% to 10%, and a modernisation of the cultural test in line with the cultural test for film tax relief (see our article on changes to the film tax relief).

It was also announced that there would be a consultation on the introduction of an orchestra tax relief from 1 April 2016 "in recognition of their cultural value and artistic importance". This was commenced on 23 January 2015 and will be open until 5 March 2015.

Speaking in November before these initiatives were officially announced George Osborne emphasised his commitment to the creative industries at the launch for the Creative Industries Federation stating "[the creative industries] express who we are as a society, as a community and give voice to the people within those communities". This highlights that together with any economic benefit these developments will attract, there is a strong cultural case for supporting our creative industries. It also reflects the statement made by Pact Chief Executive John McVay when campaigning for this new tax relief that children's television "is part of the cultural heritage that is worth government's support".

Valerie Ames, Director of Production for British children's production company Kindle Entertainment said "the advent of the animation tax credit turned the animation industry around completely; a live-action tax break will similarly make it possible to continue producing our world-renowned British children's programmes".

Baroness Floella Benjamin was "thrilled" with this announcement stating "Our children need to see themselves represented on screen to help them understand their world. It is vital for their development that they are engaged and stimulated by a range of quality and diverse British programming. The tax credit will make this happen".

Hopefully when the tax relief is brought in it will have exactly the anticipated effect and inject a new energy into British children's television production.

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