Creative Industry Tax Reliefs

Creative Industry Tax Reliefs (CITR)

New reliefs for the video games, animation and high-end television industries were confirmed in the 2013 Finance Act. Animation tax relief and high-end television tax relief commenced on 1 April 2013. Video game tax relief was finally given State aid approval by the EU in March 2014, meaning that it came into effect from 1 April 2014.

The reliefs will allow 100% additional tax deduction on qualifying expenditure, or an effective payable tax credit of 25% of qualifying expenditure.

The reliefs are long overdue and will bring the UK’s tax regime into line with other countries such as Canada and Japan which already have generous tax reliefs for the creative industries. Until now the creative sector has found it difficult to access reliefs such as R&D Tax Credits, even though these industries are often pioneers in new and advanced technologies.

The emphasis is on encouraging product development to take place in Britain.

MMP has worked with TIGA, the video game trade association, on research to justify the cost/benefit analysis for the VGTR scheme. We were delighted that TIGA’s long campaign to get VGTR relief introduced finally paid off in March 2014 with the announcement of EU State aid approval for the UK scheme.

Cultural test

Creative Sector Tax Relief

All relevant films, television programmes, animations or video games must pass a 'cultural test' to ensure the production is a 'European film', 'European programme' or 'European video game'. Alternatively it must be set in an “undetermined location” (outer space etc.) Certification and qualification for the cultural test is administered by the British Film Institute (BFI) on behalf of the Department for Culture, Media and Sport.

MMP consult on this and all aspects of submitting and claiming for Games Tax Relief

Detailed guidance on the scheme was published by HMRC in January 2015