• Bryan Crawford

Record breaking year for international film and TV production

Updated: Jul 5


2017 was a record breaking year for international film and TV production in the UK and even my home village of Gargunnock in Stirling was able to see the benefit, with filming of the Outlaw King and Outlander taking place on the surrounding land. Long may it continue.

In 2017, inward investment from major international productions topped a whopping £2.37bn:-

  1. £1.69 billion UK spend from inward investment feature films, including Jurassic World: The Fallen Kingdom, Aladdin and Outlaw King

  2. £684 million inward investment spend from high-end TV, including Game Of Thrones, Outlander and The Dark Crystal: Age of Resistance

The UK is an increasingly attractive place for creative industries to invest, and the tax system has paid out almost £2.9bn with the following incentives to date: –

  1. Film tax relief (FTR)

  2. High-end Television tax relief (HTR)

  3. Animation tax relief (ATR)

  4. Video Games tax relief (VGTR)

  5. Children’s Television tax relief (CTR)

  6. Theatre tax relief (TTR)

Film tax relief was introduced in January 2007, High-end television and Animation tax relief were available from April 2013, Video Games tax relief from April 2014, Children’s Television tax relief in April 2015 and Theatre tax relief in September 2014.


Film Tax Relief


Film tax relief (FTR) aims to promote the sustainable production of culturally British films. It is aimed directly at film production companies for the expenses they incur on the production of a film intended for release in commercial cinemas. For a film to be eligible for relief, it must be certified as British, either by passing the cultural test or through an agreed coproduction treaty, and must incur at least 25% of the total production expenditure in the UK.


From 1 April 2014, the rate of relief for larger budget films (those with a qualifying budget of £20 million or over) was increased from 20% to 25% of the first £20 million of qualifying UK expenditure, with any excess qualifying UK expenditure still receiving a 20% tax credit. The minimum UK spend threshold was reduced to 10% from the previous 25%.


From 1 April 2015 a single rate of relief of 25% has applied to all films.


A total of £2.3 billion has been paid out to meet claims since the current film tax relief was introduced in January 2007, of which over £1.6 billion were tax credit claims paid to large-budget films and over £630 million to limited-budget films


High-end Television Tax Relief


High-end Television Tax Relief (HTR) aims to promote the sustainable production of culturally British television programmes that are defined as ‘High-end’. It is aimed directly at television production companies for the expenses they incur on the production of television programmes. UK qualifying production expenditure is defined as expenditure incurred on filming activities (pre-production, principal photography and post production) which take place within the UK, irrespective of the nationality of the persons carrying out the activity. It was announced at Budget 2012 and introduced on 1 April 2013. Companies are able to claim HTR if:

  1. the programme passes the cultural test – a similar test to that for FTR ;

  2. the programme is intended for broadcast;

  3. the programme is a drama, comedy or documentary;

  4. at least 10% of the core expenditure must take place in the UK;

  5. the average qualifying production costs per hour of production length is not less than £1 million per hour; and

  6. the slot length in relation to the programme must be greater than 30 minutes.

Programmes commissioned together are treated as one programme.

However, companies can’t claim HTR if the programme:

  1. is an advertisement or promotional programme;

  2. is a news, current affairs or discussion programme;

  3. is a quiz or game show, panel show, variety show, or similar programme;

  4. consists of or includes an element of competition or contest;

  5. broadcasts live events, including theatrical and artistic performance; or

  6. is produced for training purposes.

Measures announced at Budget 2015 reduced the minimum UK expenditure requirement for television tax relief from 25% to 10% and updated the cultural test in line with the changes previously made to FTR. The reduction in the minimum UK expenditure requirement also applies to animation tax relief.


A total of £374 million have been paid out in response to 360 claims since HTR was introduced.


Animation Tax Relief


Animation Tax Relief (ATR) aims to promote the sustainable production of culturally relevant animation productions in the UK. It is aimed directly at companies producing animation programmes and was introduced on 1 April 2013. Companies are able to claim ATR on an animation programme if:

  1. the programme passes the cultural test – a similar test to that for FTR;

  2. the programme is intended for broadcast;

  3. at least 51% of the total core expenditure is on animation; and

  4. at least 10% of the core expenditure must be UK expenditure.

Animations commissioned together are treated as one programme. The same exclusions apply as for HTR, for example, if a programme is an advertisement or promotional programme, then a company cannot claim ATR.


A total of £29 million has been paid out in response to 145 claims for ATR since the introduction of the relief.


Video Games Tax Relief


Video Games Tax Relief (VGTR) aims to promote the sustainable production of culturally relevant video games in the UK. It is aimed directly at companies producing video games and was available from 1 April 2014. Companies are able to claim VGTR if:

  1. the video game is British;

  2. the video game is intended for supply; and

  3. at least 25% of the core expenditure is incurred on goods or services that are provided from within the European Economic Area (EEAA).

If the company qualifies, it is also entitled to an additional deduction in computing their taxable profits and, where that additional deduction results in a loss, to surrender losses for a payable tax credit.


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.


Almost £119 million has been paid out to 420 claims since the introduction of VGTR in April 2014.


Children’s Television Tax Relief


Children’s Television Tax Relief (CTR) aims to encourage the production of culturally British children’s television programmes in the UK. It is an extension of high-end television and animation relief but is specifically for the producers of children’s television programmes. CTR is not subject to the £1 million per programme hour threshold or the 30 minute slot length that applies to high-end TV programmes.


This measure was announced at Autumn Statement 2014 and took effect on qualifying expenditure incurred on and after 1 April 2015. A production company can claim CTR relief if:

  1. it qualifies as British by either passing the Children’s Television Cultural Test or qualifies as an official co-production (with treaty partners that allow for television);

  2. at least 10% of the core expenditure is UK expenditure; and

  3. the primary target audience of the programme is for children under the age of 15.

A total of £5 million of CTR has been paid out in response to 35 claims since the relief was introduced.


Theatre Tax Relief


Theatre Tax Relief (TTR) was announced in the Finance Act of 2014 and was introduced on 1 September 2014. Theatrical productions do not need to pass a Theatrical Cultural Test. Production companies are eligible to claim TTR if:

  1. it is a qualifying production company engaged in the making of theatrical productions;

  2. its primary focus is to play before a live audience of paying members of the general public or for educational purposes; • it has a minimum 25% EEA expenditure; and

  3. it has 2 rates of payable credit, 25% for touring productions, and 20% for others.

Since Theatre tax relief was introduced in September 2014, £60 million has been paid out relating to 1,750 productions.


Further information on the policy background and key policy changes in Film, High-End Television, Animation, Video Games, Children’s Television and Theatre is available here.


#tax #tv #television #animation #video #games #film


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