Creative Industry Tax Relief

Where a company claims relief under the R&D SME scheme on a project, it cannot claim a creative industry tax relief on the same project.

From 1 April 2024, all claims must be supported by an additional information form which is available on GOV.UK.

Administrative Changes to Creative Industry Tax Reliefs

The UK government has introduced administrative changes to the Creative Industry Tax Reliefs.

These changes specifically affect three cultural tax reliefs:

  • Theatre Tax Relief (TTR)
  • Orchestra Tax Relief (OTR)
  • Museums and Galleries Exhibition Tax Relief (MGETR)

Key Points

1. Shift from European to UK Expenditure:

  • Previously, cultural reliefs considered European expenditure as a qualifying criterion.
  • However, starting from 1 April 2024, the eligibility criteria have changed. Now, only UK expenditure will qualify for these reliefs.
  • Specifically, for theatrical productions to qualify for relief, at least 10% of core expenditure must be on goods or services used or consumed in the UK.

2. Transitional Provisions:

  • Productions that entered production before April 1, 2024, and cease their separate trade related to the production before April 1, 2025, are exempt from the new UK expenditure rule
  • Productions that meet the European expenditure condition by April 1, 2025, will still be entitled to relief on expenditure incurred before that date, even if they later do not meet the UK expenditure condition
  • Tax credits under this provision are based on the amount of surrenderable loss arising only from income received and costs incurred before April 1, 2025

Video Games Tax Relief

For VGTR both UK and European Economic Area (EEA) expenditure remain eligible until the relief is replaced by Video Game Expenditure Credit (VGEC).

Creative Industry Expenditure Analysis

Creative Industry Expenditure Analysis The total of all amounts entered in Trade > Turnover and Adjustments > Additions > Creative industry expenditure will appear here.
Other expenditure

Split this expenditure between Core and Non-core.

 

Total Enhanced Expenditure

UK (and qualifying EEA) core expenditure to date Cumulative expenditure can be entered here.
Other core expenditure to date Cumulative expenditure can be entered here.
Total core expenditure to date Total of the above.
80% of total core expenditure to date (A) 80% of the above.

UK (and qualifying EEA) core expenditure to date (B)

 As entered above.
Lower of the above (C) Lower of A and B.
Total additional deductions given for previous periods (D)

Enter the total of of additional deductions from previous periods.
Additional deduction C plus D.
Total creative industry expenditure Calculated as the total of all core and non-core creative industry expenditure.
Total enhanced expenditure Calculated as Additional deduction plus Total creative industry expenditure.