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Deloitte comments on the DCMS consultation on cultural tests

8 October 2012

Rachel Austin, Deloitte tax director, comments: “The Department for Culture, Media and Sport has published consultation documents on the cultural tests for the proposed corporation tax reliefs for the animation, high-end television and video games sectors. The tax relief was announced in the Budget in March and, subject to EU state aid approval, is expected to apply from 1 April 2013. The cultural tests are necessary in order to meet EU state aid requirements.

“Slightly different cultural tests are proposed for each of three creative sectors but each is based on the test in the current film tax relief. This provided £200m of support to the British film industry in 2010-11. The tests will require a production to gain at least 16 points out of a maximum of 30 or 31 across a range of cultural attributes. For example, points will be awarded for British locations, British characters, English dialogue, demonstrating British heritage or creativity, production activity taking place in the UK and use of British cast and crew. In some cases, points are awarded for European cultural factors as well as British.

“The Government has been working closely with industry stakeholders to produce the draft cultural tests. The animation and video games sector will be particularly pleased to note that the proposals reflect the fact that many games and cartoons are not set in the real world by awarding points for lead characters of a nationality that cannot be determined and worlds or locations that cannot be determined.

“The key remaining challenges for the Government are setting the rate of relief at a competitive level compared to other countries offering similar incentives and putting in place an efficient process for claiming the relief.”


Notes to editors:
About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press. 

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