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Tax reliefs for creative industries revealed

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18th Mar 2015
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The government did not make mention of the patent box or research and development (R&D) tax credits as in previous years, during Budget 2015.

However it did introduce new reliefs for high-end television, video games, animation and theatre, in addition to expanding film tax relief:

  • Film tax relief: This increases to 25% for all qualifying expenditure, according to this Tax Information and Impact Note (TIIN)
  • High-end television tax relief: This is extended by reducing the minimum UK expenditure requirement from 25% to 10% and modernising the cultural test. High end television and animation tax relief were first announced in Budget 2012
  • Children’s television tax relief: This is new and will start from April 2015. It will include children’s programmes that are game shows or competitions
  • Orchestra tax relief: This will be rolled out from April 2016 at a rate of 25%. The government consulted on this in January this year 

In addition, the government announced two measures that hones in on skills and training in these areas:

  • The Skills Investment fund: £4m to continue to match fund support for training and development in film, television, visual effects, video games and animation for another two years
  • The Video Games Prototype Fund: The government is pledging £4m over the next four years to this fund, designed to aid access to finance and business support and target games development talent

In addition, the government will consult on whether to introduce a business rates relief for local English newspapers, to “support them as they adapt to new technology and changing circumstances”.

Martyn Whistler, EY lead technology, media and telecoms analyst, said the further £25m pledged by the government to the creative industries is definitely a good thing.

"In particular, the UK’s video gaming industry is going from strength to strength and the further tax reliefs announced today will sustain this momentum and should represent a significant boost for this growing sector.

But, he warned, in terms of areas such as local newspapers, there are a different set of challenges.

"Competing with ever more advertising channels, particularly around classifieds, the local newspapers sector needs to consolidate and focus on costs. The tax reliefs for local newspapers will be welcome but should not lead to complacency and distract from the need for wider restructuring in this area.”

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By Charlie Carne
23rd Mar 2015 12:00

Averaging of profits

Whilst the Chancellor's new tax reliefs for the creative industries are to be welcomed, since he extended the period for averaging of farmers' profits from two to five years, it would have been helpful if he'd done the same for profits from creative works (s221 ITTOIA). In fact, to extend the period to five years specifically for farmers will presumably require more complex changes to s222 to s225 than if the extension applied to all qualifying trades listed in s221(2). Perhaps when the Finance Act is passed, we'll find that the creative industries have indeed been included!

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