Finance Bill – Deloitte comments on the creative industries tax relief draft legislation
11 December 2012
Rachel Austin, Deloitte director commenting on today’s Finance Bill says: “Following the announcement on the rate of the proposed creative industries tax relief in last week’s Autumn Statement, the Government has published its response to the consultation that took place over the summer. Draft legislation setting out the details of the relief, including the British cultural tests that companies will need to pass to qualify for relief, has also been published. The Government has confirmed that the proposed relief, which was first announced in Budget 2012, will be based on the current film tax relief. Guidance on the application of the relief will be published in due course and, subject to EU State Aid approval, the relief will apply from 1 April 2013.
“Companies engaged in the production of culturally British video gaming, animation and high end TV programming will have been delighted with last week’s announcement that the relief will offer a payable tax credit worth 25 per cent of qualifying expenditure. This will meet the Government’s objective of introducing reliefs that are among the most generous available anywhere. The detailed response published today shows that the Government has listened to comments made during the consultation, extending the high end television relief to documentaries, allowing more mixed content productions to qualify as animations and scrapping the proposed minimum threshold for video games.
“The current film tax relief provided £214 million of support to the British film industry in 2011-12, and has supported over £5 billion of investment into British films and seen a 70 per cent increase in the film production workforce since its introduction in 2007. Research by industry bodies has concluded that the new creative industries tax relief could create thousands of jobs in the UK and have a significant positive impact on UK GDP. TIGA, the videogame industry trade association, estimates that the relief could enable UK video games developers and digital publishers to secure 4,660 direct and indirect highly skilled jobs, and increase the game development sector’s contribution to UK GDP by £283m over the next five years. Research carried out by the TV Coalition concluded that a UK tax credit, similar to that of the film industry, would generate at least £350 million per year as a result of high-budget TV production relocating to the UK. It also said that it would create thousands of jobs and preserve British skills in a highly competitive economy.”
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