Deloitte comments on the announcement on the rate for creative industries tax relief
5 December 2012
Rachel Austin, Deloitte director says: “Companies engaged in the production of culturally British video gaming, animation and high end TV programming will be delighted with the Chancellor’s announcement in his Autumn Statement that the proposed creative industries tax relief will offer a payable tax credit worth 25 per cent of qualifying expenditure.
“The proposed relief was announced in Budget 2012 and is based on the current film tax relief, which provided £214m of support to the British film industry in 2011-12. The Government consulted on the design of the relief over the summer and today’s announcement responds to calls from the industry that the relief would need to be worth at least 20 per cent of qualifying expenditure in order to compete with similar reliefs in other countries. At a rate of 25 per cent, the relief will meet the Government’s objective of being among the most generous available anywhere.
“Research by industry bodies has concluded that a creative industries tax relief could create thousands of jobs in the UK and have a significant 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.
“Subject to EU State Aid approval, the relief will apply from 1 April 2013. Draft legislation setting out the detailed design of the relief is expected to be published next week along with the rest of the draft 2013 Finance Bill.”
Notes to editors:
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