UK HETV tax relief claims overtake film for first time
UK tax relief paid out to qualifying companies making high-end TV (HETV) programmes has overtaken the amount paid out to film for the first time in the tax year ending March 2022.
HETV claimed £829m against £517m for film, a jump of 131%, according to figures released by the UK government’s tax department, HM Revenue and Customs (HMRC).
In total, 380 production companies submitted 475 claims for HETV tax relief in 2021-22, claiming £829m in tax relief. This compares to the 295 companies that submitted 355 claims in 2020-21 with claims totalling £358m.
Prior to the WGA and SAG-AFTRA strikes that began in June 2023, bringing much of the inward investment with US cast and writers to a halt, HETV in the UK has benefitted from immense investment from the US streamers. Series such as Bridgerton and The Crown for Netflix and AppleTV+ comedy Ted Lasso have all been based in the UK.
For HETV claims relating to the 2021 to 2022 financial year, 36% were for £250,000 or less – however, these only accounted for 2% of the total amount paid. Claims at over £2m accounted for more than three-quarters of the total amount paid.
A higher number of claims were made for film tax relief than HETV, totalling 770 claims. The amount paid out in relief for film totalled £517m, up 24% versus the previous year. The number of films that claimed for tax relief was only up 4% year-on-year, suggesting bigger budget films particularly benefitting from the tax relief.
Of all film tax relief claims made in relation to the 2021 to 2022 financial year, 62% were for £100,000 or less, which is similar to the previous year (65%). Despite only 3% of claims relating to the 2021 to 2022 financial year being for over £5m, these accounted for 69% of the total amount paid.
A total of £1.7bn was paid out in relation to the 2021 to 2022 financial year, across all the creative industries tax reliefs. This is an increase from £1.06 billion in relation to the 2019 to 2020 financial year.
HETV tax relief accounted for 50% of the total paid out, while film accounted for 31%. Other tax reliefs measured include animation, video games, theatre, museum, orchestra and children’s TV.
Changes have been made to this year’s publication in line with the October 2022 HMRC consultation on statistics publications. Figures are published on an accruals basis only, that allocates claims to the financial year in which a company’s accounting period ends. HMRC is no longer publishing statistics on a receipts basis.
The new figures also showed a drop in the amount of tax relief claimed by video games companies. After six years of consecutive rises, there was a 6% drop in the amount of relief claimed under the video games tax relief regime. HMRC stated this is due to a drop in high-value claims (over £2m), offset by an increase in claims of between £100,000 and £2m.
Vikki Watts, a tax director from international tax specialist BDO, noted: “These tax reliefs for the creative industries are key to attracting investment into the UK and right now they are also crucial in helping these industries to bounce back from Covid.
“The significant increase we’ve seen in the amounts of tax relief paid out for high end TV claims suggests that the UK has done very well out of the huge investments being made by the streaming services into high end TV production.”
The reliefs for film, TV and video games tax reliefs are to be reformed to become refundable expenditure credits, to be phased in from the start of 2024, with productions able to claim relief under the current system until early 2027.
“New changes are also being consulted on which are likely to make it more complicated for companies claiming relief,” said Watts. ”Companies claiming creative tax reliefs will be required to complete and submit an online information form, similar to the form now required to support R&D tax relief claims, a measure designed to reduce claim errors and prevent abuse.”
This article first appeared on our sister site, Screen Daily.
Bridgerton image credit: Liam Daniel/Netflix.
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