Some £469 million in UK film tax relief (FTR) was paid to qualifying UK films in 2017-2018, according to provisional figures published by HMRC, the UK government’s revenue and customs department.
The figures for the financial year April 1 2017- March 31 2018 are expected to rise as production companies have a year to submit returns to the HMRC after the end of the accounting period. They then have a further year to amend or withdraw a claim.
Of the total 675 claims in 2017-2018 - qualifying films can make a number of claims to receive payments throughout the production process – just 4% were for over £5 million. However, these accounted for 62% of the total amount paid.
This is an increase since 2015-16 when they were 3% of the total number but 53% of the total amount paid.
The majority of claims made are for smaller amounts of £100,000 or less.
Some 180 films claimed FTR in 2017-2018, ranging from 20th Century Fox’s Kingsman: The Golden Circle to Haifaa Al-Mansour’s Mary Shelley, with a total UK expenditure of £893m.
However due to the long accounitng period in which production companies can claim FTR the £469m does not relate directly to these 180 films.
Since the relief was introduced in 2007, £2.7 billion has been paid out in FTR. This accounted for £14.8 billion of total expenditure, of which £10.2 billion was expenditure in the UK, according to the HMRC.
FTR is available for British qualifying films that either pass a cultural test or be a qualifying co-production. At least 10% of the total production costs must be incurred in the UK. This is the same for the high-end TV and animation tax reliefs.
From April 1, 2015 a single rate of relief of 25% has applied to all films.
High-end TV
Some £184 million in High-end Television Tax Relief (HETVF) was paid to 60 TV programmes with UK expenditure of £612m in 2017-2018.
About a third of the number of claims were for less than £250,000 but these accounted for just 3% of the total amount paid. Approximately 11% of the claims were for over £2 million, accounting for around 52% of the total amount paid.
Since the relief was introduced in 2013, a total of £563 million has been paid out relating to 535 claims. The amount of tax relief paid out has risen each year.
The HETVF is available for UK qualifying drama, comedy or documentary TV programmes of at least 30 minutes that pass a cultural test similar to that for films. At least 10% of the UK core expenditure must take place in the UK and the average qualifying production costs must be at least £1m per slot time hour.
Animation
Fifteen programmes with a total UK expenditure of £45m claimed Animation Tax Relief (ATR) worth £13m in 2017-2018, according to HMRC.
In 2017-2018, some 8% of ATR claims were for £250,000 or more, accounting for 36% of the total paid out.
Since the relief was introduced in 2013, 145 programmes have claimed ATR worth £44m. They accounted for £337 million of total expenditure, of which £250 million is UK based.
Companies can claim the ATR on an animation programme if it qualifies as British by passing a cultural test similar to that for the FTR, ensuring at least 51% of the total core expenditure is on animation expenditure; and at least 10% of the core expenditure must be in the UK.
Video games
HMRC paid out £105m in Video Games Tax Relief (VGTR) to 100 video games with UK expenditure of £131 million in 2017-2018.
Since the relief was introduced in 2014, 480 video games accounting for £1 billion of UK expenditure, have claimed VGTR worth £230m.
Some 60% of all claims were for £50,000 or less but these accounted for just 3% of the total amount paid out. Despite only 13% of the claims being for amounts over £500,000, these account for 84% of the total amount paid out for VGTR.
The VGTR aims to support the development of UK-qualifying video games in the UK. Companies can claim tax relief if the video game is British and at least 25% of the core expenditure is incurred on goods or services provided from within the European Economic Area (EEA). The company is also entitled to an additional deduction in computing its taxable profits and, where that additional deduction results in a loss, to surrender losses for a payable tax credit.
Both are calculated on the basis of EEA core expenditure up to a maximum of 80% of the total core expenditure by the video games company.
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