Film industry snaps up 50% of creative sector tax relief

HMRC have released official statistics covering the creative industries tax reliefs. For the year ending March 2021, a total of £1.31 billion was paid out across the segment with nearly 76% paid out to the film and TV sectors. 

The figures show an increase in the amount of relief paid in 2020-2021 across most of the sub-categories of the Creative sector with the exception of the museum, orchestra and children's TV programming industries. Film tax relief accounted for nearly half of the total amount paid out. 

HMRC warn that the tax relief amounts paid out in the year ending March 2021 are mainly related to an activity that took place in earlier years. The impact of the COVID-19 pandemic will be seen in next year’s statistics.

Number of projects, claims and amount of creative industries tax relief paid out (£ million) in 2020-21

Film sector

• Film Tax Relief (FTR) allows qualifying film production companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. A film may make several tax relief claims during the production process. A claim may cover several films.
• In the year ending March 2021, £611 million of FTR was paid in response to 900 claims, representing 870 films. The number and cost of claims has generally tended to increase year-on-year.
• A total of £4.5 billion has been paid since 2007.
• In the year ending March 2021, 67% of all claims were for £100,000 or less. Despite only 4% of the claims being for over £5 million in the year ending March 2021, they account for more than two-thirds of the total amount paid.

High-end television (HETV) tax relief 

• In the year ending March 2021, £380 million of HETV tax relief was paid in response to 315 claims, representing 315 programmes. The amount of tax relief rose by 18% from the previous year.
• Over a third of the number of claims were for less than £250,000, yet these only accounted for 3% of the total amount paid. Large claims over £2 million accounted for two-thirds of the total amount paid. 
• A total of £1.5 billion has been paid since the relief was introduced.

Animation tax relief

• Animation tax relief (ATR) allows qualifying animation companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit.
• In the year ending March 2021, £18 million of ATR was paid in response to 90 claims, representing 100 programmes. A total of £99 million has been paid since the relief was introduced.
• 28% of ATR claims were for values of over £250,000 and they accounted for 81% of the total amount paid out.

Video games tax relief

• Video games tax relief (VGTR) allows qualifying video games companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. A game may make several tax relief claims during the production process. A claim may cover several games.
• In the year ending March 2021, £180 million of VGTR was paid in response to 350 claims, representing 640 games.
• The amount of relief increased by 48% compared with the previous year. This can be explained by the timing of large payments for a small number of very high-budget games and underlying growth in the value of claims.
• A total of £624 million has been paid since the relief was introduced.

Children's TV programme tax relief

• Children’s television tax relief (CTR) allows qualifying companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit.
  • It is an extension of high-end television tax relief and animation relief but is specifically aimed at the producers of children’s television programmes. 
  • CTR is not subject to the £1 million per slot hour threshold or the 30-minute minimum slot length that applies to high-end television programmes. 
• In the year ending March 2021, £19 million of CTR was paid in response to 65 claims, representing 105 programmes. This was a fall in relief from the previous year.
• Only 9% of the claims were for amounts over £500,000, but these account for 63% of the total amount paid out.

Theatre tax relief

• Theatre tax relief (TTR) was announced in the Finance Act of 2014 and introduced in September 2014. Theatrical production companies are not required to pass a cultural test to be eligible to claim tax relief.
  • A theatre production company may make several claims during the production process.
  • A claim may cover several productions.
• In the year ending March 2021, £74 million of TTR was paid in response to 1,070 claims, representing 3,660 productions. Of the productions, 72% were non-touring.
• The highest proportion of claims are for smaller amounts, with 47% of all claims being for £10,000 or less in the year ending March 2021 whilst claims over £250,000 represented just 6% of the claims made but 58% of the total amount paid out.

Orchestra tax relief (OTR)

• Orchestra tax relief was introduced in April 2016. An orchestral production company may make a number of claims, receiving payments at stages throughout the production process.
  • A claim may cover several productions.
  • If a company has made an election covering multiple productions, then the series of productions is treated as a single production.
• In the year ending March 2021, £11 million of OTR was paid in response to 175 claims, representing 750 productions.
  • Although the number of claims has increased since the previous year, the amount of relief has fallen.
• The highest proportion of claims are for smaller amounts. Claims of £5,000 or less represented 47% of the claims in the year ending March 2021.
  • While only 7% of all claims were for amounts over £250,000, they represented 68% of the amount paid.

Museums and galleries exhibition tax relief (MGETR) 

• Museums and galleries exhibition tax relief was introduced in April 2017. Relief is only available to charitable companies, and to subsidiaries of charities and local authorities.
• Tax credits are capped per exhibition at a maximum of £100,000 (touring) or £80,000 (non-touring).
• A museum or gallery may make a number of claims, receiving payments at stages throughout the exhibition process. A claim may cover several exhibitions.
• In the year ending March 2021, £14 million of MGETR was paid in response to 190 claims, representing 1,555 exhibitions.
• The highest proportion of claims are for smaller amounts, with 49% of all claims being for £25,000 or less in the year ending March 2021.
  • Only 19% of claims were over £100,000 but they accounted for 72% of the total amount paid out.

Useful guides on this topic

Film, Animation and TV tax relief
Film, Animation and TV tax relief are three reliefs that are part of the UK's suite of creative industry tax reliefs.

Video Games Development relief
Video Games Development tax relief is a tax relief that can be claimed by games production companies in respect of expenditure incurred in the development of British video games.

Theatre Tax Relief: Tax relief for Theatrical Production
Theatre Tax Relief (TTR) is available in respect of qualifying expenditure incurred by theatre production companies on or after 1 September 2014.

Museum & Gallery Exhibitions Tax Relief
What is Museum & Gallery Exhibitions Tax Relief? When does it apply?

Orchestra Tax relief
Finance Act 2016 introduced the new Orchestra Tax relief with effect from 1 April 2016.  This relief applies for Corporation Tax.

Creative Industries Tax Reliefs: At a glance
Creative Industries Tax Reliefs, are a growing suite of special company tax reliefs that are similar in form to Research & Development (R&D) tax relief.

External links

Creative industries statistics: August 2021