The UK’s creative industries received a boost in 2013, with the introduction of Animation Tax Relief (ATR).
Creative sector tax relief legislation aims to encourage and support this vital source of employment and innovation and continue the UK’s proud heritage in producing world-acclaimed creative output.
Animation Tax Relief was added to stimulate more internationally recognised animation and high-class television programming. It provides money to reinvest in using technology to create animated films for broadcast.
Since its launch, the ATR category of creative industry tax reliefs has resulted in over £153m handed out to qualifying companies.
Who can claim Animation Tax Relief?
Any organisation creating a programme using animated imagery could be eligible for ATR. This category of corporation tax reliefs for the creative sector does not include a minimum spend.
However, there are limitations for creative tax relief of this nature.
According to HMRC:
- The programme must pass the animation tax relief cultural test or qualify as an official co-production.
- The project must be an animated programme, although it may be mixed content, and must be intended for broadcast.
- At least 51% of the core expenditure on the completed programme must be on animation production expenditure.
- 10% of the core expenditure must be spent in the UK.
For the purposes of this creative sector tax relief, HMRC will treat UK animations commissioned together as one programme. To qualify, it is also vital to keep clear development and commission records covering the entire timeline.
Ineligibility for this creative sector tax relief UK
This money is directed towards a specific niche within animation production. There are criteria that could render a project ineligible.
According to the HMRC, Animated Tax Relief will not be paid for:
- An advertisement or promotional programme
- News, current affairs or discussion programme
- Programmes that consists of, or include, an element of competition or contest
- Broadcasts of live events, including theatrical and artistic performance
- Programmes produced for training purposes.
What costs qualify for Animation Tax Relief?
To secure this creative tax relief HMRC demands detailed record-keeping, to show the costs involved for your qualifying animation project.
Only certain costs are covered by the legislation.
They are primarily your core expenditure, and the way in which your core expenditure relates to “services or goods used or consumed in the UK”.
Creative tax reliefs of this kind will be applied to expenditure that captures costs from:
- Pre-production
- Principal photography
- Post-production.
You can’t claim ATR for such outgoings as development, distribution and other non-production activities.
How much will I receive from this form of creative industry tax reliefs?
If you apply for ATR using the specialist services provided by our team, the amount you receive back to reinvest could be considerable.
You could receive up to 25% of your core expenditure for your animation programme, as a cashback from creative sector tax reliefs
For example, if your programme cost £100,000 to make, ATR could result in a HMRC creative sector tax relief cheque for £25,000.
We have developed expertise on all aspects of UK creative sector tax reliefs.
For more information about applying for ATR and for help with all creative industry tax relief HMRC dealings, contact us.
