Sargent-Disc
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UK Creative Industries Tax Reliefs - High-End Television
Summary
Having attended the British Film Institute launch of the UK high-end TV and animation tax relief at BAFTA in 2013, Laurence Sargent, Director of Sargent Disc welcomed the 2015 reduction to the minimum spend requirements 'The enhancement to the High-End Television and Animation tax relief is a positive development for the UK creative industries. The impact of tax relief for these sectors has been substantial - with levels of high-end television and animation production increasing and providing growth opportunities across the production value chain'
High-End Television and Animation
Following the success of the UK Film tax relief system introduced in 2007, the UK Government launched similar incentives for high-end TV (HETV) and animation in 2013. These benefits were enhanced in April 2015 to include:
- a reduction in the level of minimum UK expenditure from 25% to 10%
- the modernisation of the cultural test for High-end Television Tax Relief
Prior to the availability of the HETV tax credit, some high-budget TV productions chose to film abroad to lower production costs. Since then 152 domestic, inward investment and co-productions accessed the HETV tax credit and generated a production spend of £1.15 billion (July 2013 - June 2015) [1] . A recent report shows that every £1 given by the UK government in HETV tax relief returns £8.31p to the UK economy.[2]
The Requirements
The following rules apply in order to access UK high-end television tax relief:
- The production must qualify as British (see more below)
- The programme must be intended for broadcast (this includes the internet)
- The programme is a drama, comedy or documentary
- At least 10% of the core expenditure must take place in the UK
- The average qualifying production costs per hour of production length is not less than £1million per hour (Pro rata)
- The programme slot length must be greater than 30 minutes.
- The television production company (TPC) responsible for the programme must be within the UK corporation tax net.
British Qualification
To qualify as British the production must either pass the High-End Television Cultural Test or be an official UK co-production. The UK has treaties with Australia, Canada, France, Israel, New Zealand, or the occupied Palestinian Territories.
Section |
Cultural Test |
Points |
A |
Cultural Content |
|
| A1 |
High-end TV production set in the UK or EEA |
up to 4 |
| A2 |
Three lead characters are British or EEA citizens or residents |
Up to 4 |
| A3 |
The programme is based on British or EEA subject matter or underlying material |
4 |
| A4 |
Original dialogue recorded mainly in English language |
Up to 6 |
B |
Creativity, Heritage and Diversity |
|
| B |
The production represents British creativity, British heritage and diversity. |
up to 4 |
C |
Where Work is Carried Out |
|
|
C1 |
a) & b) At least 50% of the principal photography, SFX or VFX takes place in the UK c) 80% of either principle photography, SFX or VFX takes place in the UK
|
2
2 |
|
C2 |
At least 50% of the music recording or audio post-production or picture post-production takes place in the UK |
1 |
D |
Personnel Involved in the Making of the Production |
|
|
D1 |
1 of the 3 lead directors is an EEA citizen or resident |
1 |
|
D2 |
1 of the 3 lead scriptwriters is an EEA citizen or resident |
1 |
|
D3 |
1 of the 3 lead producers is an EEA citizen or resident |
1 |
|
D4 |
1 of the 3 lead composers is an EEA citizen or resident |
1 |
|
D5 |
1 of the 3 lead actors (or participants in the case of a documentary)is an EEA citizen or resident |
1 |
|
D6 |
At least 50% of the cast are EEA or residents |
1 |
|
D7 |
At least 1 of the 7 key HoDs is an EEA citizen or resident |
1 |
|
D8 |
At least 50% of the crew are EEA citizens or residents |
1 |
All sections |
Pass Mark 18/35 |
Total Points 35 |
This test is very similar to its Film Tax Relief equivalent.
18 points out of a possible 35 must be gained in order to pass the test.
Value of the relief
The tax relief is paid to the TPC and is calculated as a
percentage of qualifying UK expenditure.
- Rate of relief is set at 25% (up to a maximum of 80% of the company's qualifying core expenditure on programme production).
- The same applies to Animation (productions with content that have at least 51% core expenditure on animation).
How can Sargent-Disc help?
Sargent-Disc can provide a range of services to a production, from pre-production through to post. For information about our services, please contact us at Sargent-Disc. Let us help you with your production and employment enquiries about working in the UK, and take the drama out of your production. Our services include:
Budgeting
Movie
Magic Budgeting and Scheduling software
Production software
training
Production and post production accounting
Payroll
services
Production
card
Movie Magic Budgeting
Industry standard software is available to help when putting together a budget. Movie Magic Budgeting 7 , for example, has been designed to assist with complex budgeting scenarios. It allows for elements to be pulled through from Movie Magic Scheduling, helping to save time and ensure accuracy. It also allows for multiple incentives, credits, and rebates to be applied, compared, and analysed.
Advisors
For advice, guidance and facts about international production incentives, and to compare them online, visit the incentive solutions section of the Entertainment Partners website or contact them directly here:
EP Financial
Solutions
Joseph Chianese, Senior Vice President
Tel: 818.955.6242
Email: jchianese@entertainmentpartners.com
There are also a number of specialist accountancy and audit
firms in the UK that advise clients when structuring British
qualifying films. Here are just a few:
Grant Thornton UK LLP
Christine Corner, Partner
Tel: +44 (0)20 7728 3171
Email: christine.corner@uk.gt.com
Saffery
Champness
John Graydon, Partner
Tel: +44 (0)20 7841 4281
Email: john.graydon@saffery.com
Shipleys LLP
Steve Joberns, Principal
Tel: +44 (0)20 7312 6558
Email: jobernss@shipleys.com
Please Note: This article is for information purposes only.
