Creative Sector Tax Reliefs - no changes from consultation, fingers crossed for state aid clearance...
We saw the draft legislation for the proposed tax credits for high-end TV, animation and video games here back in December 2012. The budget OOTLAR (overview of tax legislation and rates) includes
We saw the draft legislation for the proposed tax credits for high-end TV, animation and video games here back in December 2012. The budget OOTLAR (overview of tax legislation and rates) includes these already announced creative sector tax reliefs in its list of measures where no material change is to be made to the legislation already published. Consultation on a proposed new relief for the visual effects sector was also announced, more in a separate blog entry.
The only bad news is that the draft legislation published in December has the effect that TV producers will, technically, have two largely identical and overlapping sets of tax computational provisions applying to them at the same time. There are existing computation rules for every "film", and "film" already includes a television programme or series. The new TV/animation rules include new computational rules for TV programmes, but do not exclude the application of the film rules. Arguably the new computational rules are unnecessary. But this is the sort of technical issue which can be expected to work out okay in practice.
The whole proposal remains subject to EU state aid approval, but all the noises we hear from the government and from industry insiders suggests that state aid approval is expected.
How will the new reliefs be given effect from 1 April 2013 when the legislation does not become law until July? Thanks to PACT, we know that DCMS will be issuing "comfort letters" from 1 April 2013 that projects are eligible for relief, and those comfort letters will be turned into interim certificates once the legislation receives Royal Assent in July.
The only bad news is that the draft legislation published in December has the effect that TV producers will, technically, have two largely identical and overlapping sets of tax computational provisions applying to them at the same time. There are existing computation rules for every "film", and "film" already includes a television programme or series. The new TV/animation rules include new computational rules for TV programmes, but do not exclude the application of the film rules. Arguably the new computational rules are unnecessary. But this is the sort of technical issue which can be expected to work out okay in practice.
The whole proposal remains subject to EU state aid approval, but all the noises we hear from the government and from industry insiders suggests that state aid approval is expected.
How will the new reliefs be given effect from 1 April 2013 when the legislation does not become law until July? Thanks to PACT, we know that DCMS will be issuing "comfort letters" from 1 April 2013 that projects are eligible for relief, and those comfort letters will be turned into interim certificates once the legislation receives Royal Assent in July.