At a glance

Relief is available in the form of:

• An enhanced Corporation Tax relief of up to 100% of the 'enhanceable expenditure' incurred. For example, your enhanceable expenditure is £100 and you obtain tax relief on up to £200.
• A repayable tax credit for losses surrendered of 25% of the loss up to a limit of the maximum enhanceable expenditure incurred. Prior to 1 April 2015, higher-budget films were restricted to 20% of the loss.

For Animation and High-End TV Tax Relief (HETR), enhanced expenditure is capped at the lesser of qualifying UK expenditure or 80% of total qualifying expenditure.

For Film Tax Relief (FTR), prior to 1 April 2015, this figure was higher for lower budget (<£20 million) films at 100% of total qualifying expenditure, although higher budget films were still restricted to 80%.  

From 1 April 2015, the distinction between lower and higher budget films is removed, with all films entitled to enhanced expenditure of 100% of total qualifying expenditure.

There are some slight variations across the reliefs however each film, animation or programme is treated as a separate trade and only one company may claim relief in respect of each trade.

What's new?

Finance Bill 2023-24

• As part of Spring Budget 2023, responses to the Audio-visual tax reliefs: consultation were released. 
• In July 2023, draft legislation was published as part of Finance Bill 2023-24. 
• A single Audio Visual Expenditure Credit will have effect from 1 January 2024, and, following a transition period, will become mandatory after 1 April 2027.  Qualifying expenditure will form the basis of the relief.
• The relief will replace:
  • Film Tax Relief (FTR)
  • High-End TV Tax Relief (HETV)
  • Animation Tax Relief (ATR)
  • Children’s TV Tax Relief (CTR)
  • Video Games Tax Relief (VGTR)
• There will be two types of credit: one for the audio-visual reliefs (the four film and TV reliefs) and one for video games.
• Video games, film and high-end TV will have a rate of 34%.
• Animation and children's TV will have a rate of 39%.

 See Reform of audio-visual creative tax reliefs to expenditure credits

There will also be changes to the process of claiming relief:

• Relief claims will require an online information form to be submitted as part of the claim.
  • The form will be mandatory for all claims including the new audio-visual reliefs.
  • For the new audio-visual reliefs, the form will be mandated from 1 January 2024, in line with the start of the reliefs.
  • For existing reliefs, the form will be mandated from 1 April 2024.
• Other changes will address anomalies and unforeseen consequences.

See Policy Paper: Policy Paper: Creative industry tax reliefs: administrative changes 

Cultural test

All films, TV programmes, animations or video games must pass a 'cultural test’ or qualify through an internationally agreed co-production treaty certifying that the production is a 'British film', 'British programme' or 'British video game'. In all cases, formal certification is required to qualify.

Certification and qualification are administered by the British Film Institute (BFI) on behalf of the Department for Culture Media and Sport.

The BFI will issue an interim certificate for uncompleted work or a final certificate where production has finished. If an interim certificate is received, then a final certificate must be applied for on completion. If a final certificate is not received then any interim relief which has already been paid will have to be repaid.

How to claim

For each of these reliefs, a claim must be made in the Corporation Tax return.

You should also provide:

• A British cultural certificate from the BFI (see above).
• Statements of the amount of core expenditure, split by UK and non-UK expenditure.
• A breakdown of expenditure by category.

You may make, amend or withdraw a claim to creative industry tax reliefs up to one year after the company’s filing date. HMRC may agree to accept late claims in some circumstances.

Film Tax Relief (FTR)

FTR is available on a film provided that:

• The film passes the culture test.
• The film is intended for theatrical release.
• At least 10% of core expenditure relates to goods or services used or consumed in the UK.
• The first day of principal photography took place on or after 1 January 2007.
• Finance Act 2022 introduced legislation to allow companies to continue to qualify for FTR even if the intention for the production changes from theatrical release to intention to broadcast (TV) part way through filming. The production must meet the criteria for HETR to continue to qualify.

Expenditure qualifying for relief: Core expenditure

Core expenditure includes expenditure incurred on:

• Pre-production.
• Principal photography.
• Post-production.

Core expenditure excludes any expenditure incurred on:

• Development.
• Distribution.
• Other non-production activities.

There is no relief for costs which have also qualified for R&D relief.

The UK expenditure requirement (section 1198(1) CTA 2009) for minimum UK core expenditure was reduced from 25% to 10% from 1 April 2014.

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.

For detailed guidance on the taxation of film see HMRC's Film Production Company Manual.

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% to 10% 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 performances.
• Is produced for training purposes.

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

Find detailed guidance on the taxation of animation in the Animation Production Company Manual.

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.

The UK expenditure requirement (section 1216CE(1) CTA 2009) for minimum UK core expenditure was reduced from 25% to 10% from 1 April 2015.

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 performances.
• Is produced for training purposes.

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

Find detailed guidance on the taxation of high-end television in HMRC's Television Production Company Manual.

Children's programming

The existing television tax reliefs for animation and high-end TV were extended to children's programming from 1 April 2015 by Finance Act 2015.  

A programme is a children's programme if its primary audience is expected to be under the age of 15.

Quizzes, game shows, and other programmes including an element of competition or contest can be qualifying children's programmes if the prize total does not exceed £1,000.

As with animations, children's programming will not be subject to the £1 million per programme hour threshold or the 30-minute slot length that applies to high-end TV programmes.

As with high-end TV relief, the enhanced expenditure is capped at the lower of UK qualifying expenditure and 80% of total qualifying expenditure. The repayable tax credit is 25% of the losses surrendered, up to the amount of enhanced expenditure.