UK Considers Reforms to Tax Credit System

 This week we see the UK government open a consultation period with leaders of industry on a plan to reform their tax relief measures for varying entertainment productions. In particular, they are looking to merge the tax credit system for TV and film, including children’s content and animation, into a simpler tax credit system. Blake & Wang P.A entertainment lawyer, Brandon Blake, examines the proposed changes. 

Brandon Blake

Spring 2024 Implementation

While the reforms in question will launch in their final form in Spring 2024, interested parties only have until February 2023 to make their voices heard. The proposed changes aim to both modernize and simplify what is, indeed, a rather complex claims system. In fact, there’s few proposed changes to the qualifying criteria for access to the relief programs, simply how they are managed in the wider sense. However, high-end TV could see an increase in the minimum expenditure needed to qualify. Currently, this category takes about 38% of the wider relief claims, with film accounting for a further 35%, the first time TV has surpassed film. 

Overlap in Requirements

A considerable overlap between the requirements for eligibility of this high-end TV criteria with that of film is cited as the major reason for the drive to simplify the overall system. There can be little doubt as to why the UK would like to expand the sector, however. We’ve seen a boom in international filming for series and TV alike. It’s set to grow further as streamers increasingly focus on local content as a drawcard to drive global subscriptions.

 

And as we’ve seen from many successful tax incentive programs both domestically and globally, production companies choose locations where they can leverage tax credits successfully to help extend their bottom line. The UK has been lagging a little as a destination-of-choice recently, so no doubt these reforms also seek to put it back as a location-of-choice on the broader market. We will keep you updated on any further developments as the consultation period draws to a close.