- Further to the reform of the creative industries reliefs in effect from 1 January 2024, in the Spring Budget 2024, the 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. This measure has not yet been introduced into UK legislation.
- 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.
- On 31 July 2024, HMRC published a new manual on the creative industries expenditure credits. The manual is currently
under development, and HMRC have indicated that further chapters will be added in the coming weeks.
- 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 consultation on enhanced relief for visual effects expenditure closed on 22 May 2024 and, if confirmed, the enhanced relief is expected to be introduced from 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.
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