Entertainment tax break worth £565m
The media and entertainment industry is expected to receive tax breaks worth £565m, a 9% increase on the £530m recorded last year, according to research from Moore Stephens, which suggests the corporation tax relief for British-based productions is providing a strong stimulus to UK video games developers and film, TV, animation and theatrical production companies
6 Feb 2017
According to Moore Stephens, film tax relief is worth by far the most – it is forecast to cost the Exchequer £370m in 2016/17, up from £335m in 2015/16.
Tax breaks for ‘high end’ TV productions (dramas, documentaries or comedies) are expected to be worth £105m, with theatre tax relief worth an estimated £40m and relief on animated programmes £10m.
Video games developers are expected to see one of the biggest increases in the value of relevant tax relief of any segment of the industry – forecast to rise 14% in a year to £40m in 2016/17 from £35m in 2015/16.
Moore Stephens says that tax breaks introduced in 2014 giving video games developers corporation tax relief on British games are playing an important part in helping to ensure the UK remains an attractive location compared to other international locations which are also seen as key video games development hubs, such as the US, or areas which offer attractive tax regimes for digital media companies, such as Canada, where generous tax credits are available.
To qualify for the creative industry tax reliefs all films, television programmes, animations or video games must pass a cultural test or qualify through an internationally agreed co-production treaty - certifying that the production is British.
Philip Clark, an entertainment and media partner at Moore Stephens said: ‘As businesses and talent are increasingly internationally-mobile, a simple and attractive tax system is one of the key considerations when deciding where a company should be based. These creative industries are major growth areas for the UK, so it’s vital they are supported if they are to continue to flourish in an environment of stiff global competition.’