Freelancers' Questions: Can my client get creative industry tax relief?

Freelancer’s Question: When do the newly announced tax reliefs for the creative industry take effect, and what do they look like? My client company, specifically one of its planned projects, may be able to qualify but I’m unsure of the criteria.

Expert’s Answer: The reliefs will be introduced for qualifying expenditure incurred on or after April 1st 2013. Aimed at animation, high-end television (including high-end documentaries) and video games companies, they're intended to help sustain jobs and generate investment in the UK, and could have a significant impact on both inbound and UK-based companies.

The proposed model, in the form of a super deduction (100% of qualifying core expenditure) and payable tax credit (worth up to 25% of qualifying production expenditure), is based on a similar model to the existing Film Tax Credit. The proposed new reliefs are subject to State aid approval from the European Commission.

Areas of particular concern raised during consultation were the ability for creative sector clients to meet the proposed cultural tests and how R&D tax relief and the proposed reliefs will work together. Guidance on the cultural tests will be provided in due course.

If you think you might be able to benefit from these proposed reliefs, you’ll need to put the cultural tests into the context of your organisation and consider how you may be able to claim the new reliefs. Our experience of R&D tax relief claims suggests that companies will also need to think about the interaction of the two reliefs.

As announced at the Autumn Statement, the Government will also introduce additional support for skills and talent development within the film, television and video games sectors, to come into effect alongside the new creative sector tax reliefs in April 2013. Find the perfect site to gamble online - Australian online casinos

The expert was Barry Murphy, partner at PwC’s tax practice.

 

16th December 2012

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