Creative industry tax reliefs (CITR) are a group of 5 Corporation Tax reliefs that allow qualifying companies to claim a larger deduction, or in some circumstances claim a payable tax credit when calculating their taxable profits.
These reliefs work by increasing the amount of allowable expenditure. Where your company makes a loss, you may be able to 'surrender' the loss and convert some or all of it into a payable tax credit.
Film Tax Relief (FTR) was introduced in April 2007 and 2 additional reliefs were introduced in April 2013. These are Animation Tax Relief (ATR) and High-end Television Tax Relief (HTR). A fourth relief for Video Games Tax Relief was introduced from 1 April 2014. A fifth relief for Theatre Tax Relief is to be introduced in autumn 2014.
This guide explains who can claim the reliefs, and how and when to claim.
On this page:
Your company qualifies for and can claim CITR if it is:
Companies that produce films and television production companies producing relevant animation and high-end television programmes are subject to special tax rules.
These rules apply to all:
Companies can choose to opt out of these rules. However, they will not then be eligible for CITR.
Qualifying conditions also apply to the reliefs and you can read more about these below.
To qualify for the CITR 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 a 'British film', 'British programme' or 'British video game'. In all cases, formal certification is required to qualify.
Certification and qualification is 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 you have any queries concerning certification, write to:
Head of Certification
21 Stephen Street
Your company will be entitled to claim FTR on a film as long as:
Your company will be entitled to claim ATR on an animation programme if:
Animations commissioned together are treated as 1 programme.
However, your company cannot claim ATR if the programme:
Your company will be entitled to claim HTR on a programme if:
Programmes commissioned together are treated as 1 programme.
However, your company can't claim HTR if the programme:
Video Games Tax Relief (VGTR) is available from 1 April 2014.
Your company will be entitled to claim VGTR as long as:
If your company qualifies to claim to VGTR your company is also entitled to:
Both the additional deduction and the payable credit are calculated on the basis of EEA core expenditure up to a maximum of 80% of the total core expenditure by the video games company. Core expenditure is expenditure on pre-development, principal photography and post-development.
Some video games development companies may be carrying on research and development and or may have claimed research and development (R&D) tax relief in the past. It's important to note that where Small or Medium-sized Enterprise (SME) R&D tax relief is claimed on a project, that project cannot claim for any other State Aid reliefs (including video games tax relief and grants). This means that if a video games development company chooses to claim VGTR any R&D 'bubble' within a project wouldn't qualify for R&D relief under the SME scheme.
For large companies who carry out R&D and claim under the large scheme, the rules are different. This is because R&D claimed under the large scheme is not State Aid, and therefore the 'bubbles' of R&D within a project may be eligible for R&D relief.
However, the Research and Development Expenditure Credit scheme for large companies is different to the large scheme. Under this scheme the VGDC doesn't have a choice.
Detailed guidance for VGTR will be available shortly.
Information about this relief will be available in the Autumn 2014.
When calculating the CITR:
The rates of both enhancement and any payable tax credit are determined by the level of total core expenditure incurred.
How much relief or credit you can claim depends on whether the film is considered a limited-budget film. Limited-budget films are those with a total core expenditure of £20m or less.
Limited-budget films are entitled to either:
Other films are entitled to either:
For all films, the maximum amount that can be claimed is the lower of the enhanceable expenditure for that accounting period or the amount of the loss.
Qualifying companies can claim either:
After 1 April 2014 qualifying companies can claim either:
An additional deduction in respect of qualifying expenditure on the game:
Or if the company makes a loss in any accounting period, it may surrender this for a payable video games tax credit:
Detailed guidance on television and animation production companies, including examples of how the relief is calculated, is available in the Television and Animation Production Company Manual.
Guidance for video games production companies will be available by the end of summer 2014.
You can claim for relief in your Company Tax Return once your company has received its certificate from the BFI. If you have received an interim certificate you must apply for a final certificate after the film, television programme or video game has been completed. If you don't, you will have to repay any interim relief already paid. Certificates should be sent with the return.
You may make, amend or withdraw a claim to CITR up to 1 year after the company's filing date.
HMRC may agree to accept late claims in some circumstances. You can find out more about claims and elections for Corporation Tax by following the link below.
The Enterprise Investment Scheme (EIS) provides investors who subscribe for equity in a company conducting qualifying trade generous tax benefits.
The Seed Enterprise Investment Scheme (SEIS) is designed to help small, early-stage companies to raise equity finance by offering a range of tax reliefs to individual investors who subscribe for new shares in those companies.
A specialist unit within HMRC deals with most claims for CITR. You can send your questions about claiming the reliefs to:
Local Compliance S0717
PO Box 3900
Telephone: 03000 510 191
Email: Creative Industries Unit
If your cases are dealt with by Large Business (LB), contact your HMRC Customer Relationship Manager.
If you have any general or policy queries about the current rules or earlier reliefs for film production, you can contact:
Corporation Tax, International and Stamps
100 Parliament Street
Email: Nalini Arora
The Foreign Entertainers Unit FEU)
The Foreign Entertainers Unit (FEU) is a specialist unit within the HMRC who agree the UK tax liabilities of individual non UK resident entertainers and sports persons who perform in the UK. The FEU also manages the UK withholding tax system.
Film, Television and Production Industry Guidance notes
The Film, Television and Production Industry Guidance notes provide advice with regard to the application of PAYE and National Insurance contributions to non-permanent, casual and freelance workers in the film, television and production industries.