Autumn Statement 2022 has been accompanied by a Consultation entitled 'Audio-visual tax reliefs' which seeks views on reforms to simplify and modernise the relief to support growth in the sector.
At a glance
The consultation is aimed at ensuring the reliefs are effective, provide value for money, simple to administer, future proof and do not create avoidance opportunities.
The proposals cover the five Audiovisual reliefs:
- Film Tax Relief (FTR)
- Animation Tax Relief
- High-end TV tax relief (HETV)
- Children’s TV tax relief
- Video Games tax relief (VGTR)
The consultation seeks views on:
- Merging the variety of reliefs into a single tax credit based on expenditure.
- Reforms to improve the claims process.
- Making technical changes to the legislation to:
- Set a length of TV programming and defining documentary for FTR.
- Modernising qualifying expenditure and subcontracting limits for VGTR.
Responses should be sent by 9 February to:
Reforms to the reliefs are expected in Spring 2024.
Question 1: What factors should the government consider when drafting legislation to merge the film and TV reliefs into as single scheme?
Question 2: If you are a claimant of HETV tax relief, how does the current legislation for a minimum slot length impact you?
Question 3: How would the removal of the minimum slot length legislation impact your production activities?
Question 4: How would your production activities be impacted if legislation reducing the minimum slot to 20 minutes, applying on an episode-by-episode basis, was introduced?
Question 5: What factors should the government consider when writing a definition for a documentary?
Question 6: Do you anticipate legislation for a definition of a ‘documentary’ leading to any negative impacts on your production activities?
Question 7: Would the removal of European expenditure from the qualifying costs of VGTR impact your production activities? Please describe how and include any quantitative/qualitative evidence.
Question 8: Do you anticipate any issues with the requirement of video games expenditure to be ‘used or consumed’ in the UK?
Question 9: Please describe your current subcontracting activities, including the proportion of work that you tend to subcontract relative to your overall production activities, the type of work you subcontract, and the cost of the activity you subcontract.
Question 10: Would the removal of European expenditure from the qualifying costs of VGTR impact your subcontracting activities? Please describe how and include any quantitative/qualitative evidence.
Question 11: Would an increase to or removal of the £1 million subcontracting limit impact your production activities? Please describe how and include any quantitative/qualitative evidence
Question 12: Do you claim more than one audio-visual relief? If so, which ones?
Question 13: Do you think the expenditure credit should fully replace the existing audio-visual reliefs? If not, please explain why and what changes to the expenditure credit design might change your view.
Question 14: Do you expect the implementation of the OECD Pillar 2 model rules in the UK and globally to impact the benefit of the UK’s reliefs in their current form? And if so, how?
Question 15: Assuming the same level of overall generosity, would an expenditure credit model alter the benefit of the relief(s) to you? If so, how? Please include any expected impacts of the global implementation of the OECD Pillar 2 Rules on an expenditure credit model.
Question 16: For businesses operating internationally and advisors to businesses operating internationally, are you aware of any impact on a tax liability in another country that might follow the UK moving to an expenditure credit?
Question 17: For businesses and advisors, what challenges do you envisage encountering on taking up the expenditure credit? If necessary please provide details of any specific procedural changes and/or associated costs.
Question 18: What specific steps could the Government take to help businesses who currently claim the existing audio-visual reliefs manage the transition to claiming expenditure credits?
Question 19: What changes not covered in this consultation would improve the administration of the audio-visual tax reliefs?
Question 20: Is there anything within the design of the current schemes that might be lost if they were reformed?
Question 21: Do you expect the Subsidy Control Act 2022 to impact the reforms proposed in this consultation? If so, please describe how.
Question 22: What changes could be made to the reliefs to safeguard them from abuse?
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 game production companies in respect of expenditure incurred in the development of British video games. The relief provides an enhanced deduction of expenditure for Corporation Tax relief or alternatively a repayable tax credit may be claimed.
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.