Creative Sector Tax Reliefs Launched In UK
02 May 2013
Posted by: Author: Amanda Banks
Source: Amanda Banks (Tax-News.com, London)
UK Chancellor George Osborne has formally launched tax reliefs for the creative sector, arguing that the UK's tax regime made it "the place" for filming new "high-end" television shows and for making animations.
The incentives were introduced at the start of April, and Osborne made the comments earlier this week at an event organized by the British Film Commission to mark the new tax break. Under the new rules, projects costing at least GBP1m per hour that meet a Cultural Test will be eligible for tax relief of 25%, capped at 80% of a project's total cost. The Test will determine whether a work is culturally British, in accordance with European Commission's rules on State aid.
In his speech and in a Tweet announcing the event, Osborne observed that GBP1 in every GBP10 of UK exports is from the creative industry, and he explained that he had had an "epiphany" when he noticed after watching a drama set in the UK that it had been filmed in Hungary: "It struck me as crazy that we weren't able to do something to change that," he said. According to Osborne, the creative sector is worth GBP36bn a year to the British economy, and employs 1.5m people.
He also had an "epiphany" on animation following representation from Oli Hyatt of Animation UK, who convinced him that British animation was "the best in the world" and at risk from animation industries in other parts of the world that were getting more support. According to the new rules, animation projects must be 51% animation in order to be eligible.
Osborne also hailed the fact that the creative industries were not just focused in London and the south-east of England, with animation in Bristol, video games in Dundee, and filming in locations such as Northern Ireland.
In 2009-10, tax reliefs for film industry provided around GBP95m of support, helping GBP1bn of investment in 208 films.