“This represents a £3 million increase on the figure paid out in 2019/20, which was £71 million, and comes amid calls for the tax credit to be increased to help the sector recover after the pandemic.
According to HM Revenue & Customs, the latest data, covering March 2020-21, mainly relates to activity that took place in previous years, meaning the impact of the Covid-19 pandemic will be seen in next year’s statistics.”
There’s a useful introduction to UK creative industry tax reliefs here on the BFI website. A comprehensive statistical update on these reliefs can be seen in the August 2020 report [pdf] from HM Customs and Revenue, with the 2021 figures and the commentary here.
These tax reliefs are widely seen to be vital to the UK’s cultural sector and the Creative Industries Federation is (understandably) calling for further extensions of these reliefs into areas of R&D. As they say in their September 2020 submission to a parliamentary inquiry into these reliefs.
“With the appropriate tax relief stimulus, the sector can move forward from the pandemic to not only boost economic growth but also further unlock its potential to help tackle local and global challenges, from the regeneration of our high streets to sustainability and climate change.”
(That link has plenty of useful stats on it, as does this submission from Pact). The key thing for Bectu members to know about this is that they are widely seen as having a very positive impact on the labour market.
There are specific reliefs for companies that are liable for Corporation Tax and who are producing works that meet a cultural test (i.e. can show that they are ‘British’ as set out in the rules) and if they are directly involved in the production and development of….
- high-end television
- children’s television
- animation television
- video games
- theatrical productions
- orchestral concerts
- museum or gallery exhibitions
The companies claiming the relief need to be involved with decision-making, they need to directly negotiate, contract, and pay for rights/goods/services. They have to have responsibility throughout development, from the start of pre-production until the completion of the film, programme, or game.
For theatrical productions, orchestral concerts or exhibitions, the company must be responsible for producing, running, and closing the production.
A total of £1.31 billion was paid out across all the creative industries tax reliefs last year, an increase from £1.11 billion in the year ending March 2020. Film Tax Relief accounted for almost half of the total paid out in 2020/21, while high-end television represented 30% of the total. The background to these reliefs can be seen on Wikipedia.
PS – the very basic question – what is tax relief? Answer here.