Creative businesses across the county, and in particular film makers and video game developers, could be missing out on new tax reliefs billed by the Government as ‘the most generous in the world’.
Though similar in form to the well-know and often-applied R&D tax credit regime, surprisingly little coverage has been afforded to the raft of corporation tax reliefs that are available to companies involved in the creative sector.
When you consider the Government has described these reliefs as ‘amongst the most generous in the world’, then it’s a concern.”
The scope of the Creative Industry Tax Relief (CITR) regime is wide and available to companies (but not unincorporated businesses) in the following categories:
- Film production companies
- TV production companies producing relevant animation or ‘high-end’ TV programmes
- Video game development companies
- Theatre production companies, and
- From 1 April 2016, orchestral production companies.
Relief is granted via an additional corporation tax deduction on ‘qualifying expenditure’ – though the method of calculation of the deduction differs according to the specific relief. The additional deduction can be up to 100% of the qualifying spend.
So, for example, a production company incurring £100,000 of qualifying UK expenditure to produce a ‘British film’ (as defined by the British Film Institute) – intended for theatrical release and where at least 10% of the production costs relate to activities in the UK – could claim an additional tax deduction of up to £100,000. At current corporation tax rates this would result in a tax saving of £20,000.
For more details please visit: www.knilljames.co.uk.
