In the Autumn Statement 2022, the Chancellor of the Exchequer, Jeremy Hunt MP, announced that he would be launching a consultation on reforms to audio-visual tax reliefs – specifically, film tax relief (FTR), animation tax relief (ATR), high-end tax relief (HETV), children’s TV tax relief (CTR) and video games tax relief (VGTR) – to address concerns regarding the ongoing viability of the existing reliefs.

 The reforms proposed in the consultation are:

1. Simplification of the film and tv reliefs (FTR, ATR, HETV and CTR) by merging these existing reliefs into one relief;
2. Modernisation of the criteria for HETV tax relief and defining a documentary in legislation;
3. Removal of EU legacy requirements currently embedded in VGTR; and
4. Reform of the structure of audio-visual reliefs to create above-the-line “refundable expenditure credits” to address industry stakeholder concerns that large organisations will be subject to a top up tax if the UK’s creative tax credits push an organisation’s effective tax rate below the OECD’s 15 per cent global minimum tax on the earnings. The application of any such ‘top up’ tax would negate the benefit of these credits. This would deprive the multinationals of the tax benefit the UK government intended by creating those tax credits.

The importance of these reliefs is undeniable. According to Treasury figures, in 2021-2022 alone the audio-visual reliefs provided £972 million in support to the film, TV and video games industries.

The Government is interested in feedback from a wide range of sources, including individuals, companies, representative and professional bodies. The deadline for responses is 9 February 2023. To access the consultation, click here.

If you would like to discuss the proposed reforms with one of our team, please get in touch here or with your usual Wiggin contact.