Your animation production company will be entitled to claim animation tax relief on an animation programme from 1st April 2013 if:
- The programme passes the cultural test in the European Economic Area and has been certified as a British programme.
- The programme is intended for broadcast on television or via the internet to the general public
- At least 51% of the total core expenditure is on animation. Animation might include hand drawn illustrations, digital rendering in 2D or 3D, or using photography to generate individual frames as in stop motion.
- At least 25% of the total production costs (core expenditure) relate to activities in the UK
Animations commissioned together are treated as one programme.
However, your company cannot claim animation tax relief if the programme:
- Is an advertisement or promotional programme
- Is a news, current affairs or discussion programme
- Is a quiz or game show, panel show, variety show, or similar programme
- Consists of or includes an element of competition or contest
- Broadcasts live events, including theatrical and artistic performance
- Is produced for training purposes
Brown Withey are pleased to assist companies who wish to check that they meet the qualifying criteria and will advise on how this can be achieved. The tax relief takes two forms being an additional 100% allowable deduction of core expenditure and tax credit equivalent to 25 per cent of losses surrendered.