Sargent-Disc
We take the drama out of production
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
Production software
training
Production and post production accounting
Payroll
services
Production
card
Advisors
There are 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.
