Creative industry tax reliefs

Creative industry tax reliefs and expenditure credits support companies that produce creative content in the UK. They allow eligible companies to increase their allowable expenditure, reduce their Corporation Tax bill, or claim a payable credit if they make a loss.

There are currently eight Corporation Tax reliefs and two Corporation Tax expenditure credits available to qualifying businesses in the creative industries. These cover sectors such as film, high-end television, children's television, animation, video games, theatre, orchestras, museums and galleries.

From 1 April 2024, all claims for creative industry tax reliefs or expenditure credits must include an additional information form, submitted before or alongside your Company Tax Return.

This form helps you give HMRC the detailed evidence needed to support your claim.

How creative industry tax reliefs work

Creative industry tax reliefs allow eligible businesses to:

• increase their allowable expenditure for tax purposes
• reduce their Corporation Tax liability
• or, if the company makes a loss, surrender some or all of that loss in return for a payable tax credit

You claim these reliefs through your Company Tax Return, following the detailed rules for each scheme on GOV.UK:

• Film Tax Relief
• Animation Tax Relief
• High-end Television Tax Relief
• Video Games Tax Relief
• Children's Television Tax Relief
• Theatre Tax Relief
• Orchestra Tax Relief
• Museums and Galleries Exhibition Tax Relief

HMRC groups these as creative industry tax reliefs for Corporation Tax and publishes detailed eligibility and calculation rules for each scheme.

How creative industry expenditure credits work

In addition to tax reliefs, some companies now claim Corporation Tax expenditure credits instead of the older reliefs. These credits are taxable, but they provide a separate, visible credit in your Corporation Tax calculation based on a percentage of your qualifying core expenditure.

These credits can:

• be set against your Corporation Tax liability
• be set against certain other tax liabilities
• result in a payable credit for any remaining amount

The two available expenditure credits are:

• Audio-Visual Expenditure Credit (AVEC)
• Video Games Expenditure Credit (VGEC)

For more information, read detailed guidance in the creative industries expenditure credit manual.

Who can claim creative industry tax reliefs

Your company can claim creative industry tax reliefs if:

• it is liable to Corporation Tax
• is directly involved in the production and development of:
  • films
  • high-end television
  • children's television
  • animation television
  • video games
  • theatrical productions
  • orchestral concerts
  • museum or gallery exhibitions

Additionally, your company must:

• be actively involved with decision-making
• directly negotiate, contract and pay for rights, goods and services
• hold responsibility from the start of pre-production until completion of the project

For theatrical productions, orchestral concerts or exhibitions, your company must be responsible for producing, running and closing the production.

Cultural test for tax relief eligibility

For film, high-end television, children's television, animation and video games, the production must qualify as British to access the relevant creative industry tax relief or expenditure credit. This can be done by either:

• passing a cultural test, or
• qualifying under an international co-production treaty

The British Film Institute (BFI) manages the cultural test and certification process on behalf of the UK government. The BFI will issue:

• an interim certificate for unfinished work
• a final certificate once production has finished

You need this certification to prove that your production qualifies as British when you claim AVEC, VGEC or the relevant creative industry tax relief. For more information, visit the BFI website.

For any questions about claiming creative industry tax reliefs, contact the Creative Industries Unit at HM Revenue & Customs.