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Different Types Of Creative Tax Credit Loans In The UK

Last year, HMRC paid out a whopping £1.3 billion in tax relief to UK Creative Industries. This article will break down the various types of tax reliefs available to UK businesses in the creative industries.

Types of Creative Tax Reliefs

In an attempt to make the UK the creative hub of Europe and to stimulate innovation, the UK government offers several different forms of relief to the creative industries. Some of these are:

High-end television and children’s television tax relief (TTR)

This relief is available against corporation tax for companies involved in the production of what is called “high-end” television — from 2015 this also includes children’s television or animated programming after it was amended. The scope of this relief applies to qualifying expenditure incurred on or after 1 April 2013 for high-end television or animation and qualifying expenditure incurred on or after 1 April 2015 for children’s television.

Video Games Tax Relief (VGTR)

Much like the television relief, this form of creative tax relief is available against corporation tax for UK companies involved in the development of video games.

To qualify for VGTR, your business needs to meet the following criteria:

  • You must be responsible for the majority of the planning, design, development, testing and production of the video game. To this end, your company must be known as the Video Games Development Company (VGDC).
  • The video game in question must only be intended for commercial release. However, it must have not been created for the purpose of advertising, promotion, or gambling (considering the meaning of the Gambling Act 2005) purposes.
  • The video game in question should qualify as “British” under the British Film Institute (BFI) Video Games Cultural Test.
  • At least 25% of your video game production costs must have been incurred within the European Economic Area (EEA).

Film Tax Relief (FTR)

The Film Tax Relief, the most popular of all Creative Industries Tax Relief, was recently amended a few years ago. These changes were implemented to stimulate further investment into the thriving UK film industry, and with the intention of supporting visual effects (VFX) companies and minority co-productions. The expansion of the cultural test to include European as well as British culture undoubtedly enables a larger number of films to attract this valuable form of relief. These changes are beneficial for both big and small budget films and have already immensely improved investment in the UK film and VFX industry.

Theatre Tax Relief (TTR)

The relief is available to companies involved in theatrical productions and applies to expenditure incurred on or after 1 September 2014. This relief supports the production of plays, musicals, opera, ballet and dance. It’s given by way of a super additional deduction (up to 100% of qualifying core European Economic Area i.e. EEA expenditure) and a payable tax credit (worth up to 25% of losses surrendered). Essentially, it is modelled after the structure of the Film Tax Credit.

Orchestra Tax Relief (OTR)

The Orchestra Tax Relief is available to companies for qualifying orchestra production companies putting on a qualifying orchestral concert. Relief can be made available for qualifying expenditure which is incurred on or after 1 April 2016. Relief is given by way of a super additional deduction (up to 100% of qualifying core European Economic Area i.e. EEA expenditure) and a payable tax credit (worth up to 25% of losses surrendered).

Museum Tax Relief (MTR)

Museums and Galleries Exhibition Tax Relief is a form of relief that is available for qualifying primary and secondary production companies that put on a qualifying exhibition since 2017. A qualifying company needs to either maintain a museum or gallery and be one of the following:

  • A charitable company
  • A company wholly owned by a charity or local authority

Don’t Wait Around for HMRC! Get Your Creative Tax Credit Loans with Adsum.

The process of dealing with HMRC for your claim and the long cumbersome wait for the relief to reflect in your account can be tiring. With Adsum, you do not need to go through the hassle of dealing with HMRC regarding your claim. Based on your claim on the tax return filed by your accountant, Adsum can advance your Creative Tax Credit. You could even have the money in your account within 48 hours!

Our team of experienced specialists help you review everything needed for submitting the claim and then handle HMRC on your behalf – making the entire process hassle-free for you.

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