British film, TV and video game producers will benefit from new, more generous tax credits that start today, January 1, 2024.
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To maximise the potential of the UK’s production industry and help incubate unique British talent, the government’s Audio-Visual Expenditure Credit and the Video Games Expenditure Credit replace the previous tax reliefs for film, TV and video games.
All companies will receive more tax relief than they did under the previous system, greater flexibility over production decisions and greater clarity about the amount of credit companies can expect to receive.
Under the new system, a children’s TV production, animated TV production or film with £1 million of qualifying expenditure will receive an additional £42,500 in relief.
A high-end TV production, film production or video game will receive £5,000 in relief.
To ensure fairness, the uplift in relief for animation will be extended to include animated films as well as TV programmes.
The credits will be calculated directly from a production or game’s qualifying expenditure, instead of being an adjustment to the company’s taxable profit.
Animation and children’s TV productions will be eligible for a higher credit rate of 39%, a rate increase of 5.5% under the previous reliefs.
The 34% credit rate for film, high end TV and video games is roughly equivalent to a rate increase of 0.5% under the previous tax reliefs.
The new system applies to the whole of the UK.
The government has listened to feedback from industry that companies will need sufficient time to adapt to the new expenditure credits.
For this reason, productions and games in development on 1 April 2025 may continue to use the previous tax reliefs until they end on until 1 April 2027.
Nigel Huddleston, Financial Secretary to the Treasury, said: "We are backing the makers of the next Barbie, Happy Valley and Grand Theft Auto with this new, more generous, tax credit system for British production talent." ■