Creative industries tax reliefs

Museums and galleries tax relief became the latest addition to the Government’s suite of incentives for the creative industries, which can make arts and media projects affordable. Catriona Finnie, who heads up our Creative Industries Tax Relief offering, looks at a selection of reliefs most relevant to our clients. (This article first appeared in the Winter 2017/18 edition of our Connect newsletter.)

The UK has a package of tax reliefs designed to encourage investment in certain arts and media projects. Broadly, they all work in the same manner: eligible organisations can claim an additional deduction on qualifying costs and may be able to surrender some of their loss for cash from HMRC, equating to 20% or 25% of the core cost.

Museums and galleries tax relief can be claimed on costs incurred on temporary or touring exhibitions, but does not include general day-to-day running costs. The relief is open to charities, trading subsidiaries of charities, or subsidiary companies under the control of local authorities. Commercial organisations that run museums or galleries will not be eligible. Exhibitions must be open to the public to qualify, so exhibitions that are solely for selling purposes will not be able to claim.

Theatre tax relief, in general terms, is available for productions of a play, an opera, a musical, a ballet or other dramatic piece. Theatre tax relief is applied to each qualifying production, giving  potential tax relief for every theatrical production undertaken during the financial year. Tax relief is given according to qualifying expenditure which is, broadly speaking, the production and closing costs.

Video games tax relief allows companies to claim on qualifying UK expenditure, including those involved in the designing, production and testing of the game.

Film tax relief is a tax incentive for film production companies operating in the UK: limited budget films can claim a cash repayment worth 20% of qualifying expenditure, which usually encompasses costs related to principal photography and pre- and post-production.

Orchestra tax relief is available to orchestras comprising at least 12 instrumentalists who perform to live audiences. Eligible organisations can claim a cash repayment from HMRC of up to 25% of the costs incurred in producing the concert.

There are also tax reliefs available for:

  • High-end television production
  • Children’s television production
  • Animation

As you can see, each creative industries tax relief has specific eligibility criteria so get in touch to see if you qualify, or if you’d like more information on 0131 558 5800 or email catriona.finnie@chiene.co.uk.