Reform of creative sector tax reliefs

Last updated: 19/11/2024

Further to the reform of the creative industries reliefs in effect from 1 January 2024, in the Spring Budget 2024, the previous government announced the following key measures:

A new tax credit for Independent films (IFTC) at a rate of 53%, aimed at films with budgets under £15m. Companies are able to claim a maximum benefit of £6.4m, provided that they meet the new qualifying criteria to be administered by the British Film Institute (BFI).
A 40% cut in business rates for eligible film studios in England which is available for 10 years from 1 April 2024.
The temporary enhanced rates for Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibition Tax Relief (MGETR) will now be permanently set at the higher rates of 40% for non-touring productions and 45% for touring productions and all orchestra productions.
A higher tax relief relating to UK visual effects expenditure in film and high-end TV productions (39% instead of the 34% basic rate). Visual effects costs incurred in the UK will be exempt from the 80% cap on qualifying expenditure. A consultation to inform and define the types of expenditure that will qualify for this relief was published in March 2024. At Autumn Budget 2024, the new government confirmed that the enhanced relief will go ahead with an earlier start date than expected.

From 1 April 2024, all claims for creative tax relief need an ‘Additional Information Form’ (AIF). HMRC has recently issued guidance on the new information form, as well as regulations governing the information to be included.
Timing: the IFTC can be claimed for independent films commencing principal photography post 1 April 2024, with the first claims post 1 April 2025. The 40% cut in business rates took effect from 1 April 2024. The uplift in rates TTR, OTR and MGETR will replace the planned taper off of the current temporary rates, initially scheduled for 1 April 2025. The enhanced relief for visual effects will apply to expenditure incurred from 1 January 2025, with first claims post 1 April 2025.

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