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The creative industries in the UK continue to thrive, with recent statistics from HMRC revealing a record £2.2 billion paid out in Creative Industries Tax Reliefs for the 2022-2023 financial year.
The creative industries in the UK continue to thrive, with recent statistics from HMRC revealing a record £2.2 billion paid out in Creative Industries Tax Reliefs for the 2022-2023 financial year.
This represents a substantial increase from £1.9 billion the previous year, underlining these reliefs' vital role in sustaining and stimulating the sector. Let's explore the key findings from the latest data and what they mean for creative businesses.
The landscape of Creative Industries Tax Reliefs is undergoing significant change. From January 2024, the current Film, High-end Television (HETV), Animation, and Children’s Television Tax Reliefs will start transitioning to the new Audio-Visual Expenditure Credit (AVEC), and the Video Games Tax Relief (VGTR) will be superseded by the Video Games Expenditure Credit (VGEC). These reforms will introduce new ‘above-the-line’ credits at higher rates: 34% for film, high-end TV, and video games production, and 39% for animation and children's TV companies.
Despite these upcoming changes, the 2023 statistics reflect claims made under the existing relief schemes, offering a critical snapshot of the industry's current state and potential future direction.
High-end Television Tax Relief (HETR) remains the dominant force among the creative tax reliefs, accounting for 50% of the total £2.2 billion paid out in 2023. The sector saw a 13% increase in claims, driven by an upsurge in high-budget productions, many tailored for streaming platforms that qualify for HETV rather than traditional Film Tax Relief (FTR). This trend reflects broader shifts in content consumption, with a growing number of feature-length films created for streaming services.
Meanwhile, Film Tax Relief (FTR) accounted for 25% of the total relief paid out, totalling £553 million. While the number of claims for FTR has yet to return to pre-pandemic levels, there is a notable increase compared to the pandemic-stricken 2020-2021 financial year. Notably, despite only 3% of claims being over £5 million, these accounted for a substantial 65% of the total amount paid, emphasising the impact of big-budget productions.
Theatre Tax Relief (TTR) saw the most remarkable growth, with claims increasing by 50% and the amount paid out skyrocketing by 171% to £178 million. This recovery follows a steep decline during the pandemic and is bolstered by the government’s temporary relief rate increases, now made permanent. This increase highlights the resilience of the theatre sector and the effectiveness of enhanced tax incentives in revitalising the industry.
Orchestra Tax Relief (OTR) also demonstrated strong growth, with a 20% increase in claims and a 140% surge in the total relief paid, reflecting both a recovery in the number of productions and the impact of the increased relief rates.
Animation Tax Relief (ATR) and Children’s Television Tax Relief (CTTR) remained relatively stable, with modest fluctuations in the number and value of claims. ATR saw a slight increase in the proportion of higher-value claims, while CTR experienced a slight dip in high-budget claims, driving a 4% decline in total relief paid.
However, Video Games Tax Relief (VGTR) continued to climb, with a 10% increase in total relief paid, driven by a rise in high-value claims. This growth is notable given the sector’s relative stability throughout the pandemic, positioning it well for further expansion under the new VGEC regime.
Museums and Galleries Exhibition Tax Relief (MGETR) experienced a significant rebound, with a large increase in the number of claims and a substantial rise in the total amount of relief paid, driven by the temporary, now permanent, increase in relief rates. This growth underscores the critical role of these incentives in supporting cultural institutions' recovery and ongoing vibrancy.
As we move towards introducing the new Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC), it is time for creative businesses to reassess their tax relief strategies. The higher rates of relief available from 2024 present a unique opportunity to maximise financial benefits and reinvest in future projects.
At Myriad, we specialise in helping creative businesses navigate the complexities of these incentives. Whether you’re a film production company, a theatre, or a video game developer, our team guides you through the process and ensures you’re taking full advantage of the available reliefs. Contact us today to learn how we can help you unlock the value of these opportunities and fuel your creative growth.
Official statistics publications produced by HM Revenue and Customs (HMRC) can be found here, and statistical tables can be found on GOV.UK.
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Please contact us to discuss how working with Myriad can maximise and secure R&D funding opportunities for your business.
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