The creative sector contributes vibrancy and innovation to the economy, and the Government recognises this with a range of tax reliefs and expenditure credits.
If your company is part of this exciting industry, there are valuable incentives you could claim to reduce costs and reinvest in your projects.
What are creative industry tax reliefs?
Creative industry tax reliefs aim to support businesses engaged in the creation of films, TV, video games, theatre productions, and similar projects.
These reliefs either reduce your Corporation Tax liability or offer a payable tax credit if you make a loss.
The main benefits include:
- Increased allowable expenditure
- Lower Corporation Tax bills
- The option to surrender losses for a cash credit
Tax reliefs tailored to your industry
Depending on your focus, you may qualify for one or more of the following reliefs:
- Film Tax Relief (FTR)
- Animation Tax Relief (ATR)
- High-end Television Tax Relief (HTR)
- Children’s Television Tax Relief (CTR)
- Video Games Tax Relief (VGTR)
- Theatre Tax Relief (TTR)
- Orchestra Tax Relief (OTR)
- Museums and Galleries Exhibition Tax Relief (MGETR)
Transition to expenditure credits
From April 2024, some reliefs have evolved into expenditure credits, providing a new way to benefit:
- Audio-Visual Expenditure Credit (AVEC)
- Video Games Expenditure Credit (VGEC)
These credits are based on qualifying expenditure and can offset Corporation Tax or, if surplus, be refunded as a payable credit.
Eligibility criteria
To claim these reliefs, your company must:
- Be liable for Corporation Tax.
- Take responsibility for project production, from start to finish, including financial and contractual management.
- Be actively involved in developing qualifying productions such as films, TV shows, or exhibitions.
For theatrical or orchestral productions, museums, or galleries, your company must oversee everything from production to closure.
The role of cultural certification
To claim reliefs for films, TV, or video games, projects must pass a cultural test or qualify under an internationally recognised co-production treaty.
Certification is issued by the British Film Institute (BFI), which offers interim certificates for ongoing work or final certificates for completed projects.
Additional documentation requirements
From April 2024, all claims must include an additional information form to ensure transparency and compliance.
This document provides evidence to support your claim and must be submitted alongside your Company Tax Return.
Submission timelines
Claims must be made:
- Within two years from the end of your accounting period, or
- Within 42 months from the start of your accounting period if it exceeds 18 months.
Late submissions may result in delays or invalidation.
Information needed for claims
When completing the additional information form, ensure you have the following:
Company details
- VAT registration number
- PAYE reference
- Foreign Entertainer’s Unit (FEU) reference (if applicable)
Production-specific data
- Project name (explain discrepancies with BFI certification, if any)
- Start date of pre-production or development
- Status: ongoing, completed, or abandoned
Expenditure breakdown
- Total and core expenditure for each production
- Credit, deduction, or surrendered loss amounts
Templates provided by HMRC can help organise this information.
Connected party transactions
If any connected parties are involved, disclose:
- Total number of transactions
- Combined value and details (party name, dates, amounts, and descriptions of goods or services)
Amending a claim
To amend a submitted claim, you must:
- File a new additional information form for the same accounting period.
- Re-submit your Company Tax Return, even if no other changes are needed.
Double-check your claim before submission to avoid unnecessary amendments.
If your business works within the creative industry, contact us today for advice and assistance with tax claims or submissions.