Film and television tax reliefs for production companies
- Friday, March 8, 2019
Mercer & Hole Audit and Business Advisory Partner, Andy Turner has considerable experience of the media sector and has advised many film and television production clients over the past 29 years. Working Title Films, Universal, ITV are amongst those who have benefitted from Andy’s commercial insight, technical expertise and dedication to excellent client service. Andy is also a BAFTA member – he is no ordinary accountant!
Here, Andy looks at some of the tax reliefs which can benefit British film and television production companies, which can help them to continue to produce high quality and award-winning work now and in the future.
What challenges does the industry face?
British made films and television have made a comeback, winning awards and becoming critically acclaimed across the world. Financing continues to be hard work for most and many productions are still driven by the larger studios with bigger budgets, allowing them to utilise the top industry talent. The new levels of competition within the industry has seen entrants such as Netflix and Amazon challenging existing formats and demanding higher quality content from their suppliers. Additionally, production companies face concerns over the impact of Brexit and the risks around the continuation of European funding.
Help in the form of creative tax reliefs
On a brighter note, there are several creative tax reliefs which have been introduced in recent years to help production companies produce sustainable British content. Film Tax Relief (FTR) was introduced in January 2007, High-end Television Relief (HTR) and Animation Tax Relief (ATR) have been available since April 2013, with Children’s Television Tax Relief (CTR) following in April 2015.
How are these reliefs being used?
These creative tax reliefs have been much welcomed by the industry and official statistics produced by HMRC demonstrate how valuable they are:
How do these creative reliefs work?
Whilst these creative reliefs help to provide real opportunities for production companies, there are, of course, a number of qualifying factors to consider. A brief overview follows:
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, by passing the cultural test, and must incur at least 10% of the total production expenditure in the UK. The first day of principal photography must have taken place on or after 1 January 2007.