Official Statistics

Creative industries statistics commentary: August 2023

Published 24 August 2023

1. Introduction

This is an Official Statistics publication produced by HM Revenue and Customs (HMRC). It provides information on the number and value of claims for Film, High-end television, Animation, Video games, Children’s television, Theatre, Orchestra, and Museums and galleries exhibition tax reliefs, relating to accounting periods ending in financial years up to March 2022.

The statistical tables are published on GOV.UK alongside this commentary document, together with information on the background and methodology.

This is an annual release, and the next release is planned to be in Summer 2024.

Changes have been made to this year’s publication in line with the October 2022 HMRC consultation on statistics publications. This year, tables are published on an accruals basis only. The accruals basis allocates claims to the financial year in which a company’s accounting period ends. In previous publications, figures on an accruals basis were published in tables 1.2 to 8.2. This year, and in future years, equivalent figures are published in tables 1.1 to 8.1, while tables 1.2 to 8.2 provide breakdowns of claims by claim value, on an accruals basis. Previously, these breakdowns were measured on a receipts basis, which assigned claims to the year in which the relief was paid. We are no longer publishing statistics on a receipts basis.

There is a lag in the data as companies have a year after the end of their accounting period to file their Corporation Tax return, and a further year to make, withdraw or amend a claim.

Statistical contacts: N. Chowdhury, J. Fox and M. Rowe-Brown; [email protected]

Media enquiries: HMRC Press Office; [email protected]

2. Summary

A total of £1.66 billion of relief was paid out in relation to the 2021 to 2022 financial year, across all the creative industries tax reliefs. This is an increase from £1.06 billion in relation to the 2019 to 2020 financial year. The increase was mainly driven by a sharp rise in the amount of High-end television (HETV) tax relief. For claims relating to the 2021 to 2022 financial year, HETV tax relief accounted for half (50%) of the total amount paid out and Film tax relief accounted for 31% of the total (Figure 1 and Table 1). This is the first year in which the amount of HETV tax relief has exceeded Film tax relief.

Figure 1: Creative industries tax reliefs (£ million, accruals basis), 2019-20 to 2021-22

Table 1: Number of companies, claims and amount of creative industries tax relief paid in relation to 2021-22 (£ million)

Relief	Number of companies	Number of claims	Amount of relief paid
Film	670	770	517
High-End TV	380	475	829
Animation	80	85	21
Video Games	320	345	189
Children’s TV	60	75	27
Theatre	705	725	55
Orchestra	110	110	11
Museum	185	190	9
Total	2,510	2,775	1,658

3. Film tax relief

Film tax relief (FTR) allows qualifying film production companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. A company may make several tax relief claims for a film during the production process. A claim may cover several films.

Number and value of claims by date paid

There were 770 claims made for Film tax relief in relation to the 2021 to 2022 financial year, totalling £517 million of relief (Figure 2). This is a 24% increase in the amount of relief paid compared with the previous year. Prior to the 2020 to 2021 financial year, the number of claims on an accruals basis had increased steadily year on year (Figure 3). There was a steep fall in both claims and relief paid in relation to the 2020 to 2021 financial year as a result of the Covid-19 pandemic. Though FTR claims have since increased, they have not yet reached pre-Covid levels.

Figure 2: Amount of film tax relief paid (£ million, accruals basis) 2006-07 to 2021-22

Figure 3: Number claims (accruals basis), 2006-07 to 2021-22

Of all claims made in relation to the 2021 to 2022 financial year, 62% were for £100,000 or less. The proportion is similar (65%) to the previous year. Despite only 3% of claims relating to the 2021 to 2022 financial year being for over £5 million, these accounted for 69% of the total amount paid.

4. High-end television tax relief

HETV tax relief allows qualifying production companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. A company may make several tax relief claims for a programme during the production process. A claim may cover several programmes.

Number and value of claims by date paid

There were 475 claims made for HETV relief in relation to the 2021 to 2022 financial year, totalling £829 million of relief. This is an increase of 131% from the previous year (Figure 4), showing a steep increase in HETV relief since the Covid-19 pandemic. This growth is driven largely by an increase in high-budget productions. The increase in HETV relief is in line with recent statistics produced by the British Film Institute on HETV production expenditure, which has seen substantial growth in recent years.

Figure 4: Amount of HETV tax relief paid (£ million, accruals basis) 2013-14 to 2021-22

Figure 5: Number of HETV claims (accruals basis), 2013-14 to 2021-22

For claims relating to the 2021 to 2022 financial year, 36% were for £250,000 or less – however, these only accounted for 2% of the total amount paid. High-value claims (over £2 million) accounted for more than three-quarters of the total amount paid. This proportion has increased by 13 percentage points from the previous year.

5. Animation tax relief

Animation tax relief (ATR) allows qualifying animation companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. A company may make several tax relief claims for a programme during the production process. A claim may cover several programmes.

Number and value of claims by date paid

There were 85 claims made for ATR in relation to the 2021 to 2022 financial year, totalling £21 million of relief. Both the number and value of claims have remained consistent in recent years.

Figure 6: Amount of animation tax relief paid (£ million, accruals basis) 2013-14 to 2021-22

Figure 7: Number of claims, 2013-14 to 2021-22

For claims relating to the 2021 to 2022 financial year, 28% were for values of over £250,000. These claims accounted for 77% of the total amount of relief.

6. Video games tax relief

Video games tax relief (VGTR) allows qualifying video games companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. A company may make several tax relief claims for a game during the production process. A claim may cover several games.

Number and value of claims by date paid

There were 345 claims made for VGTR in relation to the 2021 to 2022 financial year, totalling £189 million of relief. The amount of relief decreased by 6% compared with the previous year (Figure 8). This is mainly due to a drop in high-value claims (over £2 million), offset by an increase in claims of between £100,000 and £2 million. The number of VGTR claims has remained steady since the 2016 to 2017 financial year, while the total value of claims has increased.

Figure 8: Amount of video games tax relief paid (£ million, accruals basis) 2014-15 to 2021-22

Figure 9: Number of claims, 2014-15 to 2021-22

The majority of claims relating to the 2021 to 2022 financial year tended to be for smaller amounts, with 49% of all claims being for £50,000 or less; however, these claims only represent 5% of the total amount of relief. Claims over £500,000 account for 78% of the total amount of relief. This proportion is similar to the previous year.

7. Children’s television tax relief

Children’s television tax relief (CTR) allows qualifying companies to make a deduction in their taxable profits or to surrender a loss for a payable tax credit. CTR is aimed at the producers of children’s television programmes.

Number and value of claims by date paid

There were 75 claims made for CTR in relation to the 2021 to 2022 financial year, totalling £27 million in relief.

Figure 10: Amount of children’s TV tax relief paid (£ million, accruals basis) 2015-16 to 2021-22

Figure 11: Number of claims, 2015-16 to 2021-22

Only 17% of the claims made in relation to the 2021 to 2022 financial year were for amounts over £500,000, but these accounted for 74% of the total amount of relief.

8. Theatre tax relief

Theatre tax relief (TTR) was announced in the Finance Act of 2014 and introduced in September 2014. Theatrical production companies are not required to pass a cultural test to be eligible to claim tax relief. A theatre production company may make several claims during the production process. A claim may cover several productions.

Number and value of claims by date paid

There were 725 claims made for TTR in relation to the 2021 to 2022 financial year, totalling £55 million in relief. This is a 12% increase in claims and a 57% increase in relief paid compared to the previous year. The number of productions also increased, by 16%, compared to the 2020 to 2021 financial year. Theatres were severely affected by Covid restrictions, resulting in a large drop in productions as well as in claims relating to the 2020 to 2021 financial year (Figures 12 and 13). There has since been an increase in productions claimed for and relief paid, however claims remain substantially lower than pre-Covid levels, as some restrictions were still in place in the 2021 to 2022 financial year. The government’s recent introduction of a temporary increase in the relief rates of TTR, for productions which commenced production on or after 27 October 2021, may have also contributed to higher claim values in the most recent year. In Spring Budget 2023, the temporary rate increase was extended for a further two years. The higher rates also apply to Orchestra tax relief and Museum and galleries exhibition tax relief. We do not yet have sufficient data to publish statistics on tax relief claims made at the higher rates.

Figure 12: Amount of theatre tax relief paid (£ million, accruals basis) 2014-15 to 2021-22

Figure 13: Number of claims (accruals basis), 2014-15 to 2021-22

The highest proportion of claims made in relation to the 2021 to 2022 financial year is for smaller amounts, with 37% of all claims being for £10,000 or less. In comparison, claims of over £250,000 represented just 9% of the claims made but 59% of the total amount of relief.

9. Orchestra tax relief

Orchestra tax relief (OTR) was introduced in April 2016. Orchestral production companies are not required to pass a cultural test to be eligible to claim tax relief. An orchestral production company may make a number of claims, receiving payments at stages throughout the production process. A claim may cover several productions. If a company has made an election covering multiple productions, then the series of productions is treated as a single production.

Number and value of claims by date paid

There were 110 claims made for OTR in relation to the 2021 to 2022 financial year, totalling £11 million in relief. The number of claims and productions dropped by 21% and 50%, respectively, compared to the previous year. The industry was adversely affected by Covid restrictions, resulting in a large drop in productions and claims relating to the 2020 to 2021 financial year (Figure 15). Further decline in the number productions and claims in relation to the 2021 to 2022 financial year indicates that the industry is yet to recover, particularly for orchestras with low-budget productions.

However, the value of relief has more than doubled since the previous year. This is likely a combination of a recovery in high-budget productions, and the greater relief available from the temporary increase in OTR relief rates implemented as part of the government’s Covid recovery support.

Figure 14: Amount of orchestra tax relief paid (£ million, accruals basis) 2016-17 to 2021-22

Figure 15: Number of claims, 2016-17 to 2021-22

The highest proportion of claims is for smaller amounts. Claims of £5,000 or less represented 38% of the claims relating to the 2021 to 2022 financial year, which is less than for claims made in relation to both the 2020 to 2021 (54%) and 2019 to 2020 (44%) financial years. While only 15% of all claims were for amounts over £250,000, these represent 86% of the amount of relief.

10. Museums and galleries exhibition tax relief

Museums and galleries exhibition tax relief (MGETR) was introduced in April 2017. Exhibition companies are not required to pass a cultural test to be eligible to claim tax relief. Relief is only available to charitable companies, and to subsidiaries of charities and local authorities. Tax credits are capped per exhibition at a maximum of £100,000 (touring) or £80,000 (non-touring). A museum or gallery may make a number of claims, receiving payments at stages throughout the exhibition process. A claim may cover several exhibitions.

Number and value of claims by date paid

There were 190 claims made for MGETR in relation to the 2021 to 2022 financial year, totalling £9 million in relief. This represents a slight increase in the number of claims and productions, and the amount of relief claimed compared to the previous year.

Figure 16: Amount of museums and galleries exhibition tax relief paid (£ million, accruals basis) 2017-18 to 2021-22

Figure 17: Number of claims, 2017-18 to 2021-22

The highest proportion of claims made in relation to the 2021 to 2022 financial year is for smaller amounts, with 53% of all claims being for £25,000 or less. Only 17% of claims were for over £100,000, but these accounted for 61% of the total amount of relief.