Film tax relief

Film tax relief

Film, Animation and TV tax relief are three reliefs that are part of the UK’s suite of creative industry tax reliefs.

What is UK Film Tax Relief?

·         UK Film Tax Relief (FTR)is available for all British qualifying films of any budget level; the film production company can claim a payable cash rebate of up to 25% of UK qualifying expenditure.

·         The Tax Relief is capped at 80% of core expenditure  i.e. even if you spend 100% qualifying expenditure in the UK, tax relief is payable on up to 80%.

·         There is no budget limit.

How do I access UK Film Tax Relief?

·         Tax relief is available for British qualifying films.

·         Films must either pass the Cultural Test or qualify as an official co-production

·         Films must be intended for theatrical release

·         Films, including those made under official co-production treaties must reach a minimum UK spend requirement of 10%. The UK currently has eleven active bi lateral treaties

·         Tax relief is available on qualifying UK production expenditure on the lower of either 80% of total core expenditure or the actual UK core expenditure incurred

·         There is no cap on the amount which can be claimed

Film Production Companies

UK Film Tax Relief is available to the Film Production Companies responsible for the film on the condition that it falls within the UK corporation tax net.

The FPC is defined as the company responsible for the principal photography and post production of the film and for the completion of the finished film. (There is no requirement for the film rights to be owned by the FPC at the time the film is completed).

What is the minimum UK spend?

A minimum of 10% of costs must be spent on UK qualifying production expenditure.

Expenditure qualifying for relief: core expenditure

Core expenditure includes expenditure incurred on:

·         pre production

·         principal photography and

·         post production

Core expenditure excludes any expenditure incurred on:

·         development,

·         distribution or

·         other non-production activities.

UK expenditure is defined as expenditure on goods and services which are used or consumed in the United Kingdom; the recipient of goods and services is relevant and not the provider. If they are used or consumed outside the UK, they do not count as UK expenditure.

 Animation Tax Relief (ATR)

ATR is available in respect of an animation programme if:

·         the programme passes the cultural test 

·         the programme is intended for broadcast

·         at least 51% of the total core expenditure is on animation

·         at least 10% of the total production costs relate to goods or services used or consumed in the UK

Animations commissioned together are treated as one programme.

The UK expenditure requirement (section 1216CE(1) CTA 2009) for minimum UK core expenditure was reduced from 25 per cent to 10 per cent by amendment in the 2015 Finance Act, from 1 April 2015.

 ATR cannot be claimed if the programme:

·         is an advertisement or promotional programme

·         is a news, current affairs or discussion programme

·         is a quiz or game show, panel show, variety show, or similar programme

·         consists of or includes an element of competition or contest

·         broadcasts live events, including theatrical and artistic performance

·         is produced for training purposes

Core expenditure is the same as for Film tax relief above.

 High-end Television Tax Relief (HTR)

HTR is available on the costs of a TV programme if:

·         the programme passes the cultural test

·         the programme is intended for broadcast

·         the programme is a drama, comedy or documentary

·         at least 10% of the total production costs relate to goods or services used or consumed in the UK

·         the average qualifying production costs per hour of production length is not less than £1 million per hour

·         the slot length in relation to the programme must be greater than 30 minutes

Programmes commissioned together are treated as one programme.

 

HTR is not available if the programme:

·         is an advertisement or promotional programme

·         is a news, current affairs or discussion programme

·         is a quiz or game show, panel show, variety show, or similar programme

·         consists of or includes an element of competition or contest

·         broadcasts live events, including theatrical and artistic performance

·         is produced for training purposes



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