New statistics reveal that HMRC paid out £868m in creative sector tax relief during 2017/18 (£3.7bn since the reliefs were introduced).
Creative sector tax reliefs are designed to encourage more investment into cultural activity across the UK and allow qualifying companies to make a deduction in their taxable profits, and those which don’t make a profit can surrender the tax relief for a payable tax (cash) credit.
Film companies benefited most during 2017/18, with HMRC paying out £469m in tax relief (£2.7bn since the relief was introduced). For companies producing high-end television and children’s programmes, as well as animation, tax relief paid during 2017/18 totalled £210m (£625m since introduced).
Video game companies benefitted to the tune of £105m (£230m since the reliefs were introduced).
For theatres, the tax benefit paid out during 2017/18 was £77m (£137m since the relief was introduced); in addition, since orchestra tax relief was introduced in April 2016, £6.6m has been paid out.
Finally, although there are currently no statistics in terms of claims for museum and gallery exhibitions at this time, it is worth noting that claims have been possible for spend incurred from 1 April 2017.
‘The UK has a thriving creative industry and it’s clear that these tax reliefs are growing in popularity. Although the creative tax relief is now fairly well-known, there are still companies are not aware of this relief and are not therefore making claims; and there are also companies who will be claiming but not necessarily maximising the relief available.
‘It’s an incredibly advantageous tax relief. Companies – and charities - should review their position now, to ensure that they are making the most of the tax reliefs available. Otherwise, they could find themselves at a distinct disadvantage.’