The Chancellor has announced the publication of draft legislation on the extension of Full Expensing to leased assets. Creative industry reliefs were announced including an enhanced credit for UK independent film, additional relief for visual effects and permanent rates of relief for Theatre, Orchestra, Museum and Galleries Exhibition Tax Relief.
Extension to Full Expensing for leasing
From TBC:
- Draft legislation will be published shortly to extend Full Expensing and the 50% First Year Allowance (FYA). to expenditure on assets for leasing.
- The extension will take place when fiscal conditions allow.
UK Independent Film Tax Credit (IFTC)
From 1 April 2024:
- The basic rate of credit under Audio-Visual Expenditure Credit (AVEC) is 34%.
- The UK IFTC will enable eligible films to claim enhanced AVEC, at a rate of 53%, on their qualifying expenditure.
- The AVEC will be available for films with budgets under £15 million and that meet the requirements of a new British Film Institute test.
- Claims can be submitted to HMRC from 1 April 2025, in respect of expenditure incurred from 1 April 2024.
- The film must have commenced principal photography after 1 April 2024.
- Qualifying expenditure will be capped at a maximum of 80% of a film’s total core expenditure.
- The taxable credit for a film will be capped at £6.36 million.
Permanent rates of relief for Theatre, Orchestra, Museum and Galleries Tax Relief
From 1 April 2025:
- The government will introduce permanent headline rates of relief for Theatre Tax Relief, Orchestra Relief, and Museums and Galleries Exhibition Tax Relief.
- From 1 April 2025, the rates will be permanently set at 40% for non-touring productions, and 45% for touring and all orchestra productions.
- The sunset clause for Museums and Galleries Exhibition Tax Relief will be removed.
Additional tax relief for expenditure on visual effects
From 1 April 2025:
- The government will provide 39% tax credit for Visual effects costs in films and high-end TV under the AVEC.
- From 1 April 2025, the 80% cap on qualifying expenditure will be removed.
- A consultation will be released on which expenses qualify for the additional tax relief.
Business rates for film studios
From 1 April 2024:
- Eligible film studios in England will receive a 40% reduction in gross Business rates until 2034, with relief backdated to 1 April 2024.
- Studios will still be able to claim Improvement Relief where qualifying conditions are met.
Useful guides on this topic
Full expensing & First Year Allowances
What is full expensing? When does it apply and what is the rate of allowance? How are disposals of full expensing assets dealt with? What assets qualify for the 50% First Year Allowance (FYA)? How do I deal with disposals of 50% FYA assets? How do I make a claim?
Creative Industries: Audio-Visual & Video Games Expenditure Credit
From 1 January 2024 Audio-Visual Expenditure Credit (AVEC) has replaced Film Tax Relief, High-End TV Tax Relief, Animation Tax Relief, and Children’s TV Tax Relief. Video Games Expenditure Credit (VGEC) replaces Video Games Relief.
Creative Industries: Theatre Tax Relief (TTR)
What is Theatre Tax Relief (TTR)? Who can claim it? What are the conditions?
Creative Industries: Orchestra Tax relief
What is Orchestra Tax relief? What are the qualifying conditions? What is the rate of relief?
Creative Industries: Museum & Gallery Exhibitions Tax Relief
What is Museum & Gallery Exhibitions Tax Relief? When does it apply?
Creative Industries: Film, Animation and TV tax relief
Film, Animation and TV tax relief are three reliefs that are part of the UK's suite of creative industry tax reliefs.
Business Rates: What's new?
The government is exploring different methods for the reform of business rates. Proposals, including three-year rating valuations, have been set out in several different consultations and are examined below.
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