theatre tax relief

What Is Tax Relief and How Can It Benefit My Theatre?

The UK’s creative industries companies faced unprecedented financial difficulties due to the Coronavirus Pandemic, with ticket sales at UK theatres falling by 93% due to the pandemic, in 2020. In response to this, Theatre Tax Relief is just one of the Creative Industries Tax Reliefs that have had their rates doubled until 2023, this was announced in the Government’s Autumn 2021 Budget, giving new hope to the Creative Industries to see them out of the Pandemic. 

The UK is well known for it’s proud heritage, producing some of the biggest world-acclaimed creative material, which is why these tax reliefs are so important. The UK is home to over 1,100 active theatres, both modern and classic from the West End in London, to others dotted across England, Scotland, Wales. Some of the most well-known theatres in the UK known worldwide are The London Palladium (The UK’s largest theatre, with a capacity of 2286 seats), National Theatre, London, The Royal Exchange Theatre, Manchester and The Festival Theatre Edinburgh.

Understanding the benefits of TTR (Theatre Tax Relief) is integral for all theatrical production companies across the UK, it gives companies the chance to lower pre-production costs as long as they are producing qualifying productions, and fit the criteria for the scheme. 

What is Theatre Tax Relief (TTR)?

You may be wondering in regards to theatrical production companies, what is tax relief? And how can it actually benefit me? Theatre Tax Relief is a government incentive that financially assists companies that are producing dramatic productions/ballets for live performance. The scheme was introduced in 2014, being added to the group of Creative Industries Tax Reliefs. It was introduced to encourage and support theatrical companies within the UK’s Theatrical Industry to boost employment within the sector and innovation. 

A company will be eligible to reduce pre-performance costs by 20-25%, with the scheme aiming to offer financial support to companies that qualify. A very unique aspect of the scheme is that some businesses that already claim Corporation Tax exemptions can still be eligible for it, which is not common in the world of Government Tax Incentives, such as the R&D Tax Credits scheme.

How Can I Qualify For Theatre Tax Relief (TTR)?

In order to qualify for Theatre Tax Relief, there are certain criteria that need to be met for a company to be considered. The criteria is:

  1. The company must be actively engaged in the planning and decision making of theatrical productions for live performance, to paying members of the general public or for educational purposes.
  2. The company must also directly negotiate, contract and pay for rights, goods and services.
  3. It also must be responsible for putting the production on from the beginning to end, including employing and engaging the performers.
  4. The company can be constituted as a limited by shares, limited by guarantee, Charitable Incorporated Organization, Community Interest Company or a Scottish Charitable Incorporated Organization. 
  5. It must also fall under the Company Tax Regime, even if a business doesn’t file for Company Tax Returns, they will still be able to claim. 

In terms of what would make a company NOT eligible, if a company’s main purpose is advertising, or promoting goods and services, the performance consists or even includes competitions/contests, uses wild, the productions are of a sexual nature, the productions main objective is to make a relevant recording, or if the production has been produced for training purposes only then it will not be eligible.

What makes my performance qualify for Theatre Tax Relief?

When it comes to determining whether your Theatre Tax Relief (TTR) production itself will qualify, it will also need to follow a criteria, which is:

  1. The performance has to be a play, opera, musical, ballet or any live dramatic piece where the performers fully or partially play roles and tell a story.
  2. Most or all of the performances will be required to be played to the public, or for educational purposes.
  3. At least 25% of the core expenditure incurred on goods and services provided from within the UK or the European Economic Area (EEA). 
  4. The production itself meets the commercial purpose condition.

How much Theatre Tax Relief can I claim?

The amount of Theatre Tax Relief (TTR) that you will be able to claim will depend on the expenses incurred on the production. The current rate has been more than doubled from the previous 20% rate for Non-Touring productions to 45%, and from 25% for Touring productions to 50%, this has been effective from the 27th of October 2021 til the 31st of March 2023. 

The scheme works by allowing theatrical companies to claim an additional deduction to reduce their profits, or to increase a loss which will therefore reduce the amount of Corporation Tax that needs to be paid. If your company is loss-making, all or some of this can be surrendered for a payable tax credit, the rate for this is 20% for surrendering losses, but you will be able to surrender losses at an increased rate of 25% if the production is touring. To be considered as a touring production, you must fit the criteria which is:

  1. You must intent to have performances at 6 or more separate premises at the start of the production
  2. There must also be at least 14 performances of which are in at least 2 separate premises. 

What core costs are eligible for Theatre Tax Relief?

The core costs that your theatrical production company will be able to claim for are costs that are directly from the making of the production, this means that marketing, distribution, financing, initial concept work and ordinary running costs of the production will NOT be eligible to be claimed for.

Do I need to pass the BFI Cultural Test?

No, you will only need to provide the BFI Cultural Test certification if you are claiming under the Film Tax Relief (FTR), High-End Television Tax Relief (HTR), Animation Tax Relief (ATR), Children’s Television Tax Relief and Video Games Tax Relief (VTR) schemes.

How Can I Claim Theatre Tax Relief?

To claim TTR, you can do this on your Company Tax Return by calculating the amount of your additional deduction that is due to your company, and also any payable credit due. You will be required to provide evidence to support your claim to easily assist HMRC to assess your claim quickly and efficiently. 

You can provide this evidence by sending it with your Company Tax Return, or by completing the form given by HMRC to provide supporting evidence for the claim. Before you complete the form, you must claim through your Company Tax Return, and within the form you must provide the following details:

  1. Title of production
  2. A document that relays the tax calculations, which include deductions and credit.
  3. The company’s total core expenditure
  4. A detailed breakdown of the core costs and non-core costs between UK and European Economic Area (EEA) countries, and countries that are outside of the UK and EEA.
  5. The company’s qualifying expenditures broken down by catergories
  6. The date of the start of production phase
  7. The opening night of the production
  8. If the claim is a touring production, then you will need to provide the number of performances at each premises, and also the date of each performance.

To find out more about the details that need to be provided, click here.

You can make, amend or withdraw a Theatre Tax Relief (TTR) claim for up to one year after the company’s filing date, HMRC may also agree to accept late claims in some circumstances, but this is not recommended. It is always optimal to use a Creative Industries Tax Relief specialist such as Green Jellyfish, who are highly experienced with dealing with HMRC, compiling reports and ensuring compliance. To learn more about how we can help you, click here.

What other Creative Industries Tax Reliefs are available?

If your company is within a different sector or the Creative Arts, and you are wondering whether there is tax relief available for you, there are 7 different Tax Incentives, which are:

  • Animation Tax Relief (ATR)
  • Children’s TV Tax Relief
  • Film Tax Relief (FTR)
  • High-End TV Tax Relief (HTR)
  • Museum & Gallery Industry Tax Relief
  • Orchestra Tax Relief
  • Video Games Tax Relief (VGTR)

To find out more about Theatre Tax Relief, or any of the Creative Industries Tax Relief incentives, click here.

creative industries

A Quick Guide: Creative Industries Tax Relief

Did you know that the creative industries contribute roughly £13 million to the UK economy every hour? This impressive figure is focused solely on the financial benefits that the creative industries bring to the table, let alone the cultural enrichment that they have on our community’s well being and futures. The pandemic has proved just how important the creative industries are to the UK with worries that the industries would not be able to fully recover, but the Government’s new pledge to keep industries such as Theatre, Orchestra, and Museum & Gallery thriving are extremely promising. 

In 2020, there was a 27% increase in tax relief paid out by HMRC, but despite the Government’s efforts at trying to give back to the creative industries, awareness of the CITR tax relief scheme is extremely low, which has resulted in many businesses believing that they are not at all eligible for the scheme, but this is usually not the case. 

What is Creative Industries Tax Relief?

Creative Industries Tax Relief (CITR) is a form of Government State Aid that was introduced in  2012. It aims to reward the creative industries with an increased amount of allowable expenditure, or if your business is loss-making then you may be able to surrender the loss and be rewarded in the form of a payable tax credit. It is made up of a program of different reliefs, which are:

Who can claim?

Businesses will be able to reap the benefits of Creative Industries Tax Relief if they fit the correct criteria. The company must also have responsibility throughout development, from the start to completion of the programme, film or game. For theatrical productions, exhibitions and orchestral concerts the company needs to be responsible for producing, running and closing the production. 

The criteria for eligible businesses is that it must be: 

  • A UK business
  • Subject to pay corporation tax
  • Is directly involved in the production and development of video games, theatrical productions, animated television programmes, high-end television programmes, museum and gallery exhibitions, orchestral concerts, children’s television programmes and films.
  • Directly negotiates, contracts, and pays for rights, goods, and services
  • Your company must have responsibility throughout development, from the start of pre-production until the completion of the film, program or game.
  • For theatrical productions, orchestral concerts or exhibitions, the company must be responsible for producing, running, and closing the production.
  • Passes cultural test

What is a cultural test?

The Cultural test is an objective assessment by the BFI (British Film Institute) of the cultural attributes of a film, television program, or game, ensuring that it is culturally British or qualifies as an official co-production. Working on a points-based system, it measures value in the following areas:

  • Cultural content
  • Cultural contribution
  • Cultural hubs
  • Cultural practitioners

How much can I claim?

The size of the claim will depend on the size of the project, and HMRC provides a unique formula for each creative sector to help you to estimate your claim. The reliefs all generally provide an increased reduction of expenditure for Corporation Tax Relief, the specific rates for each tax relief are:

Animation Tax Relief (ATR)The relief rate is worth up to 25% of your core expenditure for your animation programme, in the form of cashback. 

Children’s Television Tax Relief The relief rate is worth up to 25% of all qualifying expenditure, you can only claim for 80% of your production budget, but there is no cap at all on the amount you can receive. 

Film Tax ReliefThe relief rate is worth up to 25% of qualifying expenditure, in the form of a payable cash rebate, there is a cap for the total you can claim on, at 80% of the qualifying expenditure.

High-End Television Tax Relief The relief rate is worth up to 25% of your core expenditure for the High-End programme, in the form of cashback.

Museum & Gallery Tax ReliefNon-touring exhibitions will qualify for a relief rate of 20%, and touring exhibitions will qualify for up to 25%, with a maximum payable amount being £100,000.

Orchestra Tax ReliefOrchestral concerts will be eligible for tax relief rates of up to 50% of your core expenditure.

Theatre Tax Relief (TTR)Companies can reduce pre-performance costs by 20%-25%, it is important to note that some businesses that already claim corporation tax exemptions can still be eligible to claim through the scheme.

Video Games Tax Relief (VGTR) The relief rate is worth up to 20% of the core production costs of a game, and applies for video games that are going to be sold to the public, and where the minimum of 25% of the core expenditure on the game is incurred on goods and service provided from within the EEA.

How do I make a Creative Industries Tax Relief Claim?

If your claim requires a cultural test you must wait until your application with the BFI has been approved and you have received your interim/final certification. If you do not get a final certificate from BFI’s Certification Unit then you will need to repay the tax relief that you received prior to the completion of your productions which will not be ideal. You should ensure that the Interim and final certifications are attached when submitting your returns.

It is always optimal to use a specialist within the field of Creative Industries Tax Relief to submit your claim, such as Green Jellyfish, with profound experience in handling specialized tax relief claims. The benefits of using a specialist to submit your claim is that they also have the knowledge to maximize your claim, while still ensuring compliance and that it is made as simple for you as possible. 

  1. Assemble a report which clearly outlines the nature of the project/activity
  2. Calculate qualifying expenditure
  3. Deduct that from the taxable profits (Can be complex, best to use a specialist such as ourselves)

What We Can Do For You

We understand that making a Creative Industry Tax Relief claim can be a very complex process, so we aim to make it as easy as possible for you. Our tax relief specialists are here to help you and your business, whether you are a start-up company or a multinational. We not only aim to get you the largest possible claim, but also to build a relationship to truly understand your business, it’s challenges and ambitions. 

  1. A simple client interview to determine your eligibility, learn about your businesses and the work that you have done. 
  2. We will request supporting documents to get the process underway
  3. We will compile all calculations, liaise with HMRC and handle all queries from them about your claim, to ensure that your application will not be rejected or delayed, and to maximize the amount you are claiming.
creative industries tax relief

Covid-19’s Impact on the Creative Industries

On the 26th of March, 2020, the first UK lockdown brought livelihoods, careers and lifestyles in the ways we knew it to a dramatic standstill, it was something that none of us had anticipated, expected or thought was even possible. Shops, pubs, restaurants, gyms, cinema’s, theatres and more were forced to close their doors in the battle against Coronovirus, causing detrimental damage to business owners, and the overall UK economy. Many UK businesses were already struggling to stay afloat due to inflation and soaring business rates, but the pandemic lead to mass layoffs and many business closures for those that could not survive an economic shock of this size, in addition to it’s impact on public health. 

One of the worst-hit industries that greatly suffered due to the Pandemic is the performing arts sector. The arts are integral to the social, civic and economic wellbeing of the UK, playing an important role in contributing to the UK economy through tourism with 9.2% of all tourists visiting the UK visiting a theatre musical, opera or ballet. It also has contributed greatly to employment and education; even having extensive participation to childhood and youth, being linked to social and emotional outcomes for people later on in life. Whether it was a theatre or an art 

gallery, the tight lockdown restrictions meant that these venues would not be able to open their doors until it was deemed as safe. 

The Performing Arts sector relies on physical audiences, and due to social distancing restrictions, no rehearsals were possible to take place as well as the venues were unable to open, forcing many arts institutions to rethink their traditional ways of entertaining the general public and to digitalize. 

Live Music and Theatre

The UK’s music industry thrives from buzzing crowds with people filled with passion for their favorite artists, but due to the Covid-19 social distancing rules, this was no longer possible. Many music venues, producers, artists and more suffered greatly due to the Pandemic. Virtual experiences and streaming platforms were projected to be on the rise and levitate to new heights of popularity, yet it was reported by Spotify that streams of the world’s biggest hits were actually down 11%. It has been extremely hard for the sector to recover, with 1 in 3 jobs reportedly lost within the live music sector due to venue closures, employment levels plummeted by 25% from 2019’s all time high of 197,000 down to 128,000 in 2020. Many workers that are self employed within the Music Industry were also not covered by the Government’s support schemes, and to top it off Brexit has affected the industry further as it’s effect on artist’s mobility. 

“With the live industry now having to deal with the appalling impact of Brexit on artist’s mobility, now is the time for this government to step in and provide realistic and effective support for an industry that was once the envy of the world and is now struggling to survive,”  – MU General Secretary Horace Trubridge

Music has always been an integral part of many people’s lives, in a recent report, 74% of participants reported that music is very important to their quality of life. The UK itself listens to 60 billion hours of music every year, which is equivalent to 7 million years of music. 

When it comes to the detrimental effects that the pandemic has had on the Theatre, venues such as New York Broadway and the London West End closed their doors to customers for the foreseeable future while UK lockdowns were put in place. It has been reported in December, 2020 by the appg that the box office lost £1.04 billion of revenue, with producers scheduled performances following guidance suffering millions of pounds in additional losses from the November lockdown in 2020 due to the absence of private market and government-backed cancellation insurance. The industry requested a Government-backed insurance scheme, expansion of tax reliefs for the creative industries and further actions to be taken in terms of reduction of VAT and more Covid tests for employees. 

Film, TV and Cinema

The Covid-19 pandemic is still subjecting the Film, TV and Cinema industry to extensive financial damage due to all productions coming to an abrupt halt in the March 2020 lockdown, film festivals were cancelled and all cinema’s closed their doors to the public. Never before have such detrimental effects been evident on the Film and TV  industry that thrives through delivering entertaining experiences to society across the globe, freelancers became jobless and with lack of Government support and isolation for those working in the industry, it has been described as a ‘collective trauma’ by the industry. 

“Those who operate as one-person limited companies make up 28%, and those who work PAYE on consecutive, short and fixed-term contracts make up the remaining 36%. This remaining 64% of our freelance was excluded from SEISS.” – Film TV Charity

In terms of the damage done to the cinema’s, there were already rising concerns that the new streaming era would take the industry out whole. With large streaming platforms such as Netflix, Hulu, Amazon Prime and Disney Plus becoming the new norm, it was expected that the combination of Covid-19 and these streaming powerhouses would never allow the Cinema industry to bounce back, but it is evident that this is not the case. Hollywood blockbuster movies such as Suicide Squad, Space Jam: A New Legacy and Jungle Cruise starring the Rock raked in more than two-and-a-half times Vue’s weekly numbers for the past 18 months. Odeon Cinemas also exclaimed that during August 2021, they saw the biggest turnout they had experienced since the lockdown restrictions allowed customers back into their Cinemas.   The success proves just how popular Cinema’s remain to be, but the damage from UK lockdown’s has still reportedly ‘bruised’ the industry. 

“The fact we are seeing almost pre-pandemic levels today is a positive sign for the future. But it is important to remember as an industry we are still pretty bruised from the past 18 months. It is going to take a period of time before we corporately recover.” – Tim Richards (Chief Executive of Vue Cinemas)

The TV industry is also recovering from the damages done by the Pandemic. The impact of it saw higher numbers of daily viewers watching for longer periods of time, averaging at 3 hours and 32 minutes per person (18 mins higher than the time spent in January 2020), but the number of people watching broadcast TV decreased by 3% between January 2020 and January 2021. TV broadcasts such as the News gained more popularity due to society relying on BBC News, ITV News and Channel 4 News to keep them up to date with the latest Covid-19 news. The PM’s statement commencing on the 4th of January 2021 was the most watched programme that month, with over 14 million people watching BBC One, but since the PM’s announcement of the third lockdown, viewing greatly declined. Independent producers have suffered the most from the economic turmoil that the Pandemic brought, that seems to stem from lack of Government support for indie producers, with countries such as the U.S, France and Italy agreeing to provide a financial lifeline for their creative industries. The U.S was providing state funds to Hollywood to ensure that it did not go under, whereas the UK has been described as being “in a completely different environment”.

It is apparent across industries that large TV, Film & Cinema firms can easily stay afloat, but when it comes to independent producers and freelancers, their futures are more fragile than ever before. The risk of large streaming platforms is a grave risk, but also the huge financial loss that the industry faced due to the Pandemic is still leaving a large gap across all of these industries. 

Museum & Gallery

The Museum and Gallery industry have faced numerous challenges following on from the devastating Covid-19 Pandemic. Many of the UK’s Museum and Gallery venues, exhibitions, education programmes, community events, fundraising planners and their organizations face an uncertain future due to temporary closures of cultural venues all over the country. The closure of these venues has resulted in the industry having to rethink it’s traditional structure, coming up with innovative and radical ideas to help the industry stay afloat. Visit’s to the world’s top 100 museums fell by 77%, the Louvre in France managed to retain it’s position as the world’s most visited Museum thanks to the Leonardo Exhibition, but it still suffered an estimated income loss of more than £90m, but in terms of UK venues, the Tate Modern in London suffered a massive £56 million loss in revenue.

In a recent study, the Art Fund asked Museum & Gallery directors, museum and gallery professionals and representatives from across the globe how the Pandemic had affected them and what they would need to recover. The costs of managing large outdoor spacing following social distancing has been reported to possibly outweigh the benefits of reopening their doors, due to the highly expensive task of managing hygiene in highly interactive areas, which most art galleries and museum’s take pride in hosting. The main concern reported is to be able to attract visitors back into the venues and the wellbeing of staff following the Pandemic, large reductions of cash flow have a knock on affect not just on the venues themselves in terms of upkeep, but also on staff quality of life and offering them the support that they need.

How did the Creative Industries adapt?

In order to keep the creative industries afloat, innovative changes are paramount. With tragedies such as the Pandemic, the creative industries are seen are important to society’s everyday quality of life. While Biomedical science firms are working hard to tackle the ever changing variants of Covid-19, cultural and creative industries can assist with tackling social and economic efforts. Research and Development is extremely important for every sector, with many businesses thriving and paving the way to our future societies, and this emphasis on R&D needs to be apparent in the world of the creative arts also. 

Traditional creative practices need to be met with next-gen technology in order to pull the UK’s creative industries out of turmoil, giving global audiences better access to our works through free streaming and previously recorded performances of Orchestra’s and Plays, giving producers and consumers broadened digital access by continuing to work with streaming platforms such as Netflix to stream performances, overcoming entry barriers for freelancers that are trying to break into the digital creative market and helping smaller organizations to thrive in the harsh industry climate. Digitalization is extremely important for the industries to stay ahead of the game and to thrive, with platforms such as Social Media playing an integral part of keeping the Theatre industry afloat during lockdowns, performances such as Mamma Mia were carried out by cast members for audiences to watch live on their mobile devices and live music concerts from top artists drew millions of views across social media.

When it comes to overcoming venue issues, drive-in performances and socially distanced spaces can help the industry be prepared for any further Pandemic’s or problems that society may face. Performances were carried out with no audience and shown on streaming powerhouses such as Amazon Prime and Netflix for users to watch, and they were met with good reception, this way of performing to audiences has the potential to reach global audiences, larger than ever before which may give industries such as Orchestra and Theatre a well needed cash injection. 

What is being done to help the Creative Industries stay afloat?

Since the start of the Pandemic, many things have been put in place by the UK Government to assist these industries. Tax Relief’s have been extended for the creative industries, giving them access to larger cash pots to help them continue to trade. The Creative Industries Tax Relief provides 8 different avenues of Government Aid, which are Animation Tax Relief, Children’s TV Tax Relief, Film Tax Relief, High-End TV Tax Relief, Museum & Gallery Tax Relief, Orchestra Tax Relief, Theatre Tax Relief, and Video Games Tax Relief. Organisations can apply for the scheme themselves or through the use of a professional (which is preferred to ensure precision and maximized claim amounts), and it even offers support for businesses that are making a loss allowing them to either surrender it or possibly convert some or all of it into a payable tax credit. In the 2021 Autumn Budget, it was announced that the rates of tax relief will be as much as doubled for industries such as Theatre & Museum and Gallery offering a new lease of life for these venues. 

There are also extensions for Business Rates Relief, more support offered for freelancers working within the creative industries, comeback campaigns across the country to try and entice crowds back into our beloved cultural spaces supported by re-opening roadmaps to clearly outline when crowds were able to return. There have also been better Government-backed insurance schemes, continued reduction of VAT across the board and better Covid-19 facilities for testing, to reduce outbreaks of the virus within the workspace. 

To find out more about Creative Industry Tax Relief, don’t hesitate to get into contact with us to discuss your eligibility, our team of specialists will get to know you and your business from the inside out to meet your business goals and understand what you would like to get out of the relief.

video-games

What is Video Games Tax Relief?

Video Games Tax Relief is a Government incentive that allows businesses to save up to 20% of their production costs via an enhanced deduction of Corporation tax if the game is profitable, or cash payment if the game makes a loss. It supports UK video game developers by giving them money back for designing, producing, and testing new video games. It was introduced in 2014 by the UK Government, with the aim to entice game developers to innovate. 

Some of the main benefits of claiming through the scheme are that it can give you a very strong competitive advantage as you will have access to extra funding, you can secure the investment that you need to reach your business goals, you will receive your payout within 4-10 weeks of filing your claim, and there is also less of a financial risk as you are being rewarded with extra income even if your game development does not go to plan, it is a safety blanket for your projects.

In a new report from HMRC, it reveals that 350 claims were approved, covering 640 games equalling to over £180m in claim value via the scheme for the 2020-2021 tax year.  A 48% increase in the number of Video Games Tax Relief claims was apparent compared to the previous year, with it also being reported that 87% of total tax claims were for amounts over £500,000. The relief is a great way to provide a lifeline for small and large businesses, it can be difficult enough to develop the game itself, but marketing a successful video game can be extremely costly.

What exactly is a video game?

A Video Game by definition is an electronic game that allows players to control images on a video screen with an input device or user interfaces, such as a controller or keyboard. It then generates visual feedback based on a story following rules. There are many different genres of video games such as simulation, sandbox, shooters, real-time strategy, action, adventure, role-playing, puzzles and more, the possibilities for video game creation are endless with modern-day technology, and the industry is one of the most innovative when it comes to ground-breaking technologies. 

There are many different types of games consoles in which games are played on, by definition, it is an electronic device that outputs a video signal or image in order to display a video game controlled by a controller. Some of the most popular video games consoles are Playstation, Nintendo Switch, and Xbox. 

The British Video Gaming Industry has reached a pivotal moment when it comes to investment, according to TIGA (The Independent Game Developers’ Association), the industry is worth more than £500 million. The consoles that are eligible to claim Video Games Tax Relief for are PC’s, Televisions, Smartphone’s or other mobile devices, Tablets and Video Consoles such as the ones listed previously within this section. 

“Our core purpose is to strengthen the games development and digital publishing sector. We achieve this by campaigning for the industry in the corridors of power, championing the industry in the media and helping our members commercially.” – TIGA

Who is eligible for the Video Games Tax Scheme?

The criteria that makes a business eligible to claim under the Video Games Tax Relief scheme is relatively simple, as long as it is the company that qualifies as the Video Games Development Company (VGDC) in relation to the game that they are claiming for will be able to make the claim, it is not possible for individuals, partnerships and limited liability partnerships to claim. The business must be incorporated in the UK or have a permanent UK establishment that falls within the umbrella for Corporation Tax liability. A cultural test will also need to be carried out, with the video game needing to score 16 out of 31 points to pass it, the game will be rewarded for the setting of the video game being based in the UK or EEA, the game being based on a British or European subject matter, the lead characters of the game being British or EEA citizens and residents, and the dialogue being mainly in the English language. 

Points are also rewarded for the cultural impact that the game would have on the UK demonstrating creativity, British heritage or cultural diversity, the use of the UK’s facilities for conceptual development, storyboarding, programming, design, music recording, audio production or voice recording, and finally the use of personnel within the project, such as project leaders, scriptwriters and more.

What qualifies for Video Games Tax Relief?

Any types of video game are eligible, but the legislation does outline the exclusion of video games where they are produced for advertising, promotional purposes or gambling. It is important to note that there can only be one VGDC in relation to the game, if this is not the case then the company that is most engaged in the qualifying activities will be able to claim, not both; this is to prevent excessive abuse of the scheme. To see the full eligibility criteria, click here. 

Some examples of qualifying costs would be expenditure on initial concept design, advertising and marketing, entertaining and audit costs, finance costs, and debugging and maintenance work on the completed game. To see a full list of the qualifying expenditure for Video Games Tax Relief click here.

How to apply for Video Games Tax Relief


In order to make a VGTR claim, you will need to do this through the Company Tax System within a Company Tax Return or an amendment to an existing one. You will need your British Film Institute, statements that prove your core expenditure which has been broken down by category and EEA/Non-EEA spending, and also a separate profit and loss account for each game you are producing and claiming for. HMRC have a specific way to calculate the tax credit, and it can be difficult to calculate your profits, losses and other critical financial information, which is why our services can not only mean your claim is submitted successfully but also maximized to it’s full potential to help you meet your individual business needs. Contact us today to find out if you are eligible, or to simply learn more about the scheme in a no-obligation phone call, click here.

theatre-tax-relief

Creative Industries Tax Relief doubled in Autumn Budget 2021

The new Autumn Budget 2021 has meant that the creative industries will receive £1.31bn in tax relief, which is double the original amount until 2023, saving the sector up to £245m. This increase totals to a 5.8% boost. It is a very welcoming and encouraging piece of news for the industry, following the detrimental effect that the pandemic has had on the creative industries, which is still prominent. Creative Industries Tax Relief was introduced to support the innovation and growth of businesses within the industry, they are very similar to Research & Development Tax Credits as the goal is to reward businesses for their innovative projects. 

“To support theatres, orchestras, museums, and galleries to recover from covid, the tax reliefs for all those sectors – from today until April 2023 – will be doubled. And they won’t return to the normal rate until April 2024. That’s a tax relief for culture worth almost a quarter of a billion pounds.” – Madam Deputy Speaker

The new rates will make companies within the theatre, orchestra, museums, galleries and exhibitions sectors eligible to claim double of the original amount, however, the video games, TV and Film sectors will only be able to claim the original amounts as they do not rely on live audiences for their revenue. The new and updated relief rates will also only apply to productions that have recently started to encourage new productions to hit the market. 

Film and TV Tax Relief

The changes to Film & TV Tax Relief addresses issues from both the pandemic, but also the ever-changing consumer demands when it comes to the way that they access visual entertainment. The possibility to switch from Film Tax Relief to High-End TV Relief during production will come into effect from the 1st of April, 2022 which eliminates the issues surrounding productions needing to solidly be one or the other from the outset, which does not always go to plan. An example of this would be that if a film ended up being better suited to being a broadcast without theatrical release, then it could lose out on the relief completely. 

Theatre Tax Relief

The current rate that British theatres of any budget level can claim, is a payable cash rebate for qualifying expenditure up to 20% for non-touring projects, and 25% for touring projects. From 27th October 2021 to 31st March 2023, the rates for non-touring projects is increased to 45%, and for touring projects, it’s increased to 50%. 

For 2023 and 2024, the rates will be 30% for non-touring projects, and 35% for touring projects, but after this period of time has passed they will go back to their original rates of 20% and 25%. 

Orchestra Tax Relief

The current rate for British Orchestra productions to claim is 25%, which is being doubled to 50% from the 27th of October 2021. The rate will be 35% from 2023 to 2024 and will go back to its standard rate of 25% in 2025.

Museums, Galleries and Exhibitions Tax Relief

The Museums, Galleries and Exhibitions Tax Relief scheme have a current rate of 20% for non-touring projects, and 25% for touring projects, but from 27th of October 2021 until the 31st of March 2023 it will increase to 45% for non-touring projects, and double to 50% for touring projects. 

A further example of Government investment into the creative industries sectors is a new £2m Beatles attraction on the Liverpool Waterfront, with galleries, museums being projected to lead the way in cities and towns throughout the country to rebuild social wellbeing, and inspire visitors. It has been stated within the Autumn Budget that there will also be further clarifications to the current legislation for Theatre, Orchestra, and Exhibitions Tax Relief which will aim to improve anti-abuse of these schemes and to make them all better incentives. These changes have been in effect since the 4th of November, 2021. 

“Levelling up is also about protecting our unique culture and heritage. The British Museum; Tate Liverpool; the York Railway Museum…we’re investing £850m to protect museums, galleries, libraries, and local culture, and thanks to the Culture Secretary, over 100 regional museums and libraries will be renovated, restored, and revived.” – Madam Deputy Speaker

To conclude, the Government’s investment into creative industries tax relief will help to work towards driving the UK to be a world leader in theatre and to help the country recover from the pandemic. To find out more about how your creative industries projects can be rewarded, click here or contact us now to book a free no-obligation phone call to discuss your eligibility.