HMRC have released statistics on the number and value of claims for the entertainment industry relating to accounting periods ending in financial years up to March 2022 highlighting a sharp rise High-End Television (HETV) tax relief claims dominated by 'big' productions.
According to HMRC figures a total of £1.66 billion of relief was paid out in relation to the 2021 to 2022 financial year, across all the Creative industries tax reliefs. This is an increase from £1.06 billion in relation to the 2019 to 2020 financial year.
The figures show that High-End Television (HETV) tax relief claims for 2021/2022, accounted for half of the total amount paid out. Film tax relief accounted for 31% of the total.
This is the first year in which the amount of HETV tax relief has exceeded film tax relief.
Figure 1: Creative industries tax reliefs (£ million, accruals basis), 2019-20 to 2021-22
Film
Film tax relief (FTR) allows qualifying film production companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. A company may make several tax relief claims for a film during the production process. A claim may cover several films.
- There were 770 claims made for Film tax relief in relation to the 2021 to 2022 financial year, totalling £517 million of relief.
- This is a 24% increase in the amount of relief paid compared with the previous year.
- Though FTR claims have since increased, they have not yet reached pre-COVID levels.
- 62% of the claims were for £100,000 or less.
High-end television (HETV)
HETV tax relief operates like FTR and a claim may cover several programmes.
- There were 475 claims made for HETV relief in relation to the 2021 to 2022 financial year, totalling £829 million of relief.
- This is an increase of 131% from the previous year, showing a steep increase in HETV relief since the COVID-19 pandemic. This growth is driven largely by an increase in high-budget productions.
- For claims relating to the 2021 to 2022 financial year, 36% were for £250,000 or less, however, these only accounted for 2% of the total amount paid.
- High-value claims (over £2 million) accounted for more than three-quarters of the total amount paid.
Table 1: Number of companies, claims and amount of creative industries tax relief paid in relation to 2021-22 (£ million)
| Relief | Number of companies | Number of claims | Amount of relief paid |
|---|---|---|---|
| Film | 670 | 770 | 517 |
| High-End TV | 380 | 475 | 829 |
| Animation | 80 | 85 | 21 |
| Video Games | 320 | 345 | 189 |
| Children’s TV | 60 | 75 | 27 |
| Theatre | 705 | 725 | 55 |
| Orchestra | 110 | 110 | 11 |
| Museum | 185 | 190 | 9 |
| Total | 2,510 | 2,775 | 1,658 |
Animation tax relief
Animation tax relief allows qualifying Animation companies to make several tax relief claims for a programme during the production process. A claim may cover several programmes.
- There were 85 claims made for ATR in relation to the 2021 to 2022 financial year, totalling £21 million of relief. Both the number and value of claims have remained consistent in recent years.
- For claims relating to the 2021 to 2022 financial year, 28% were for values of over £250,000. These claims accounted for 77% of the total amount of relief.
Video games tax relief
Video games tax relief (VGTR) allows a company may make several tax relief claims for a game during the production process. A claim may cover several games.
- There were 345 claims made for VGTR in relation to the 2021 to 2022 financial year, totalling £189 million of relief.
- The amount of relief decreased by 6% compared with the previous year.
- This is mainly due to a drop in high-value claims (over £2 million), offset by an increase in claims of between £100,000 and £2 million.
- The number of VGTR claims has remained steady since the 2016 to 2017 financial year, while the total value of claims has increased.
- The majority of claims relating to the 2021 to 2022 financial year tended to be for smaller amounts, with 49% of all claims being for £50,000 or less; however, these claims only represent 5% of the total amount of relief.
- Claims over £500,000 account for 78% of the total amount of relief. This proportion is similar to the previous year.
Children’s Television Tax Relief (CTR)
- There were 75 claims made for CTR in relation to the 2021 to 2022 financial year, totalling £27 million in relief.
- Only 17% of the claims made in relation to the 2021 to 2022 financial year were for amounts over £500,000, but these accounted for 74% of the total amount of relief.
Theatre Tax Relief
Theatre Tax Relief (TTR) was announced in the Finance Act of 2014 and introduced in September 2014. Theatrical production companies are not required to pass a cultural test to be eligible to claim tax relief. A theatre production company may make several claims during the production process. A claim may cover several productions.
- There were 725 claims made for TTR in relation to the 2021 to 2022 financial year, totalling £55 million in relief.
- This is a 12% increase in claims and a 57% increase in relief paid compared to the previous year.
- The number of productions also increased, by 16%, compared to the 2020 to 2021 financial year.
- Theatres were severely affected by COVID restrictions, resulting in a large drop in productions as well as in claims relating to the 2020 to 2021 financial year.
- There has since been an increase in productions claimed for and relief paid, however, claims remain substantially lower than pre-COVID levels.
- The government’s recent introduction of a Temporary increase in the relief rates of TTR, for productions which commenced production on or after 27 October 2021, may have also contributed to higher claim values in the most recent year. In Spring Budget 2023, the temporary rate increase was extended for a further two years.
- The highest proportion of claims made in relation to the 2021 to 2022 financial year is for smaller amounts, with 37% of all claims being for £10,000 or less.
- In comparison, claims of over £250,000 represented just 9% of the claims made but 59% of the total amount of relief.
Orchestra tax relief
Orchestra tax relief (OTR) was introduced in April 2016. Orchestral production companies are not required to pass a cultural test to be eligible to claim tax relief. An orchestral production company may make a number of claims, receiving payments at stages throughout the production process. A claim may cover several productions.
- There were 110 claims made for OTR in relation to the 2021 to 2022 financial year, totalling £11 million in relief. The number of claims and productions dropped by 21% and 50%, respectively, compared to the previous year.
- The industry was adversely affected by COVID restrictions, resulting in a large drop in productions and claims relating to the 2020 to 2021 financial year.
- Further decline in the number productions and claims in relation to the 2021 to 2022 financial year indicates that the industry is yet to recover, particularly for orchestras with low-budget productions.
- The value of relief has more than doubled since the previous year. This is likely a combination of a recovery in high-budget productions, and the greater relief available from the temporary increase in OTR relief rates implemented as part of the government’s COVID recovery support.
- The highest proportion of claims is for smaller amounts. Claims of £5,000 or less represented 38% of the claims down from 54%.
- While only 15% of all claims were for amounts over £250,000, these represent 86% of the amount of relief.
Museums and galleries exhibition tax relief
Museums and galleries Museums and galleries exhibition tax relief was introduced in April 2017. Exhibition companies are not required to pass a cultural test to be eligible to claim tax relief. Relief is only available to charitable companies and to subsidiaries of charities and local authorities. Tax credits are capped per exhibition at a maximum of £100,000 (touring) or £80,000 (non-touring).
- There were 190 claims made for MGETR in relation to the 2021 to 2022 financial year, totalling £9 million in relief.
- This represents a slight increase in the number of claims and productions, and the amount of relief claimed compared to the previous year.
- The highest proportion of claims made in relation to the 2021 to 2022 financial year is for smaller amounts, with 53% of all claims being for £25,000 or less.
- Only 17% of claims were for over £100,000, but these accounted for 61% of the total amount of relief.
Useful guides on this topic
Creative Industries Tax Reliefs: At a glance
Creative Industries Tax Reliefs, are a growing suite of special company tax reliefs that are similar in form to Research & Development (R&D) tax relief.
Actors: Tax overview
What expenses can actors claim for tax purposes? Are there any special rules for actors and entertainers? What are the VAT rules? How should actors account for their income?
High-end Television Tax Relief (HTR)
What is High-end Television Tax Relief (HTR)? Who can claim it?
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.
Video Games Development relief
Video Games Development tax relief is a tax relief that can be claimed by game production companies in respect of expenditure incurred in the development of British video games. The relief provides an enhanced deduction of expenditure for Corporation Tax relief or alternatively a repayable tax credit may be claimed.
Orchestra Tax relief
What is Orchestra Tax relief? What are the qualifying conditions? What is the rate of relief?
Tax relief for Theatrical Production
What is Theatre Tax Relief (TTR)? Who can claim it? What are the conditions?
Museum & Gallery Exhibitions Tax Relief
What is Museum & Gallery Exhibitions Tax Relief? When does it apply?
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