Animated film productions in the UK are set for a boost as the government reveals increased tax relief, to take effect from 1 January 2024.
The creative industry has grown at more than 1.5 times the rate of the wider economy over the past decade, making it an important sector for the Chancellor’s plan to grow the economy. The new tax changes announced today are expected to be worth £5 million each year to business and come alongside the Audio-Visual Expenditure Credit which was uplifted at budget from 33.33% to 39%.
This also follows the Creative Industries Sector Vision published last month which set an ambition to grow the creative industries by an extra £50 billion by 2030. These changes are a key part of the government’s plan to get the economy growing and make the UK the best place in the world to start and grow a business.
Financial Secretary to the Treasury Victoria Atkins said: “We want the UK to be the best place to start and grow a business and while we have the lowest corporation tax rate in the G7, we are not complacent. The changes we are making are about backing business to innovate and grow the UK economy, creating good jobs across the country.”
This measure is part of 23 tax announcements published as part of the government’s ‘Legislation Day’, where draft legislation for an upcoming Finance Bill is published, as well as technical tax documents and consultations mostly from measures announced at the Spring Budget. Also published is the proposed design for a simplified R&D scheme, which would be born out of a merger from two previous schemes, as well as draft legislation also published to cement a further new £500 million per year scheme to support 20,000 R&D intensive SMEs.
A final decision will be made in the Autumn on whether to merge the Research and Development Expenditure Credit and Small Medium Enterprise relief schemes to form a new scheme. A merged scheme would simplify the system, by creating a single set of qualifying rules, and giving clarity on how much could be claimed before claims are made.
The government has also announced that:
- Any Ukrainian who has arrived in the UK under the Family, Sponsor and Extension Ukrainian visa schemes will no longer need to register or tax their vehicle. This will last 36 months, in line with the length of their visas, and can be applied retrospectively from one’s arrival, potentially saving them hundreds of pounds.
- Income tax will be exempt on payments made under the Family Network Support Package, which are aimed to keep children out of state care and in their family network where appropriate and in their best interests. The Department for Education will set out further details on the pilot scheme in the summer.
- It will simplify the process so people who need to start paying the High Income Child Benefit Charge will not need to fill out a Self-Assessment form to pay the charge, but will be able to do it through their tax code. HMRC will set out in due course how it will do this.