The Treasury has published a consultation document on proposed corporation tax reliefs for the animation, high-end television and video games industry, which was announced in the Budget. Subject to EU State Aid approval, the reliefs are expected to apply from 1 April 2013.
Deloitte comments on proposed corporation tax reliefs for TV and games industry
Richard Blackwell, Deloitte partner, comments: “The Treasury has today published a consultation document on proposed corporation tax reliefs for the animation, high-end television and video games industry, which was announced in the Budget. Subject to EU State Aid approval, the reliefs are expected to apply from 1 April 2013.
“The aim of the proposed relief to support a sustainable creative industry with a world class skills and talent base in the UK will be welcomed by the industry. However, given the long lead time for productions in these sectors, companies need to know the value of the proposed reliefs as soon as possible to start building it into their planning processes. If the Government sets the rate of relief at the right level, the proposals will increase the UK’s competitiveness in these sectors encouraging additional investment in the UK and discouraging UK companies from producing culturally British content in countries that already offer incentives such as Ireland, Hungary and France.
“The proposed design of the reliefs is based on the current film tax relief, which provided £200m of support to the British film industry in 2010-11. Slightly different rules are proposed for each of the three creative sectors but each includes a cultural test, a requirement for 25% of core expenditure to be incurred in the UK and the option of receiving a cash tax credit. The consultation document does not include the proposed rate of relief but states that it is expected to be of similar generosity to the current film tax relief, which is currently worth about 12% to 20% of core expenditure depending on the budget of the film and whether a payable credit is claimed. The Government has also indicated that the proposed reliefs are likely to include rules designed to prevent abuse, such as offloading the reliefs to private individuals, through loss schemes.”
The Deloitte Cambridge office comprises 8 Partners and over 250 staff who deliver a full range of professional services to the East Anglian region. As well as focussing on the life sciences and technology sectors for which the region has become so renowned, the office has long standing specialisms in other sectors including the professions, consumer business, food and agribusiness.