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UK Screen Alliance and Animation UK welcome the consultation into screen sector tax reliefs

Nov 21, 2022

UK Screen Alliance and Animation UK welcome the announcement made by the Chancellor of the Exchequer in the Autumn Statement (17/11/2022) of a consultation on reforming the screen sector tax reliefs.

The government will consult on a series of proposals that will go further to incentivise the production of culturally British content and support the growth of the audio-visual sectors to continue to thrive in the UK.

UK Screen Alliance and Animation UK have been campaigning for reform of the tax reliefs for several years and have proposed that the rate of relief should be increased above 25%, to reflect the higher rates of incentive available in competitor countries.

Animation UK has provided evidence to illustrate how the lack of a competitive rate of relief in UK is allowing hundreds of millions of pounds of production to be taken out of the UK in order to receive a better incentive. While the Chancellor was speaking, the “State of the Animation Nation” panel at the Manchester Animation Festival was emphasising this point, as the news of the consultation was breaking.

Kate O’Connor, executive chair of Animation UK said, “The Animation industry has an international reputation for creative and technical excellence. We operate globally in an industry worth an estimated $2.5 bn. With the right investment, support for IP retention and more competitive tax relief we can support growth, create jobs and gain an increased market share. Our competitors have significantly increased their tax relief and investment. Quite simply, despite our excellence we are not competing on a level playing field and we look forward to the opportunity to feed into this important consultation.”

The government has acknowledged that there is a perception that the 80% cap on qualifying expenditure encourages the more portable aspects of production, such as visual effects (VFX), to move abroad and will consult on the removal of the cap.

Neil Hatton, CEO of UK Screen Alliance said: “The 80% cap is a major inhibiting factor to the growth of our highly creative VFX industry, with many UK-founded companies prioritising investment abroad, rather than in the UK. We have made proposals to government to neutralise the effects of the cap, so we welcome the opportunity to further these discussions, with the intent to allow productions which have filmed here and have “capped out” of relief, to be incentivised to remain in the UK for the VFX as well.”

This consultation will run from 17th November to 9th February. UK Screen Alliance and Animation UK will be gathering the views of our members and will be submitting a strong evidence-based response.

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