New tax incentives for British film, TV and video game makers
Starting from January 1, 2024, British film, TV, and video game producers will enjoy more generous tax credits under a newly improved system.
- New and improved tax credit system for film, TV and video game production companies
- An extra £42,500 in relief for children’s TV, animated TV and animated film production
- £5,000 in relief for high-end TV, film or video game production
To boost the potential of the UK’s cutting-edge production industry and British talent, the government has introduced the Audio-Visual Expenditure Credit and the Video Games Expenditure Credit, replacing previous tax reliefs for these sectors.
Under the new system, all companies will receive more tax relief, increased production flexibility, and a clearer understanding of their expected credit amounts.
Nigel Huddleston, Financial Secretary to the Treasury, said: “We are backing the makers of the next Barbie, Happy Valley and Grand Theft Auto with this new, more generous, tax credit system for British production talent. The UK is a world leader in creativity, and we want to ensure that continues well into the future by making it easier for British film, TV and video games to thrive”.
Under the new system, a children’s TV production, animated TV production or film with £1 million of qualifying expenditure will receive an additional £42,500 in relief. A high-end TV production, film production or video game will receive £5,000 in relief. To ensure fairness, the uplift in relief for animation will be extended to include animated films as well as TV programmes.
The credits will be calculated directly from a production or game’s qualifying expenditure, instead of being an adjustment to the company’s taxable profit.
Animation and children’s TV productions will be eligible for a higher credit rate of 39%, a rate increase of 4.25% under the previous reliefs. The 34% credit rate for film, high end TV and video games is roughly equivalent to a rate increase of 0.5% under the previous tax reliefs.
This new system applies across the entire UK, with a transition period allowing productions and games in development on April 1, 2025, to continue using the previous tax reliefs until April 1, 2027.
The UK’s creative industry, valued at £126 billion, includes the largest video game employee base in Europe, with nearly 21,000 employees.
Lastly, Warner Bros. Studios’ expansion in Leavesden, Hertfordshire, in 2024, is expected to create 4,000 new jobs and contribute over £200 million to the UK economy. This development was announced during Chancellor Jeremy Hunt’s visit to Warner Bros. Studios in Los Angeles last year.
Further information
- Qualifying expenditure will remain broadly unchanged. For the Video Games Expenditure Credit, to align the conditions for video games with film and TV, at least 10% of expenditure has to be ‘used or consumed’ in the UK.
- At Spring Budget 2023, the Chancellor also extended the higher 45% (for non-touring productions) and 50% (for touring productions) rates of relief for theatre, orchestra and museums for two additional years to April 2025
