Organisations, charities and companies involved in certain creative industries can receive up to 20 pence in the pound back on costs from HM Revenue & Customs.
We have claimed payable tax credits for clients working in the theatre, film, music and video game industries. We have also claimed for museum exhibitions and an animated children’s television series.
Charities (whether incorporated or unincorporated) are eligible for the scheme as they are subject to corporation tax – even though in most cases they don’t pay tax on their exempt charitable income.
Eligible organisations generally need to be making new productions, and a proportion of the costs usually have to be incurred in the UK or the EEA. In the case of exhibitions produced by museums and galleries, items in the exhibition cannot be for sale.
The reliefs typically work by providing an 80% enhancement on core production costs – meaning that the organisations are treated as having spent 1.8 times their actual spend.
For profitable companies who pay tax, this enhancement can be used to reduce taxable profits. For loss-making companies or charities who pay no tax, the lesser of either the loss created by the enhanced expenditure or the amount of the enhancement, can be surrendered for a payable tax credit of either 20% or 25%.
The higher rate of 25% applies in most cases, except for theatre productions and exhibitions in museums and galleries which are not taken on tour and are payable at 20%.
We can advise on how best to maximise the amount of relief available. Just get in touch for a chat.
