Creative Sector tax reliefs – intended to be “the most generous available in the world”
Does your company carry out video game development or high end TV programme productions such as dramas, documentaries or animations? If so from 1 April 2013 it may qualify for enhanced Corporation Tax relief of up to:
– An extra 100% of qualifying UK production or development expenditure (or, if lower, 80% of the total qualifying expenditure), or;
– If your company is in a loss making position, a payable cash tax credit amounting to 25% of qualifying expenditure
Richard Wilson, chief executive of TIGA, the trade association representing the computer games industry has said the tax credit would be “simple to administer and economically impactful,” providing “a powerful boost” to the creative industries.
To qualify for the regime there are a number of conditions that must be met including:
– The game/programme must be certified as British (the “culturally British” test will award points for attributes such as British/EEA locations and characters, storylines of British or EEA origin, the use of British/EEA cast/crew/staff)
– At least 25% of the core expenditure on the game/programme is UK expenditure
– The game/programme is intended to be available to the general public
– For dramas and documentaries the programme length must be greater than 30 minutes and the average core expenditure per hour of the slot must be at least £1m
Some production companies may qualify for R&D tax relief as well a Creative Sector tax relief, however, a company will not be able to claim relief twice on the same expenditure. Moore and Smalley can prepare comparisons of the two reliefs to quantify the value of the potential benefit to enable an informed decision to be made.
If you would like to discuss the types of activities or costs which qualify. Or have any other Creative Sector tax relief queries please don’t hesitate to Tony Medcalf on 01772 821021.