How can high-end UK television production companies benefit from tax relief

High-end television tax relief (HTR) allows UK television production companies to claim enhanced tax relief on pre-production, principal photography and post-production expenditure.

The relief is intended to encourage the production of culturally British high-end television programmes in the UK.

Who can make a tax relief claim?

To qualify for HTR you must be responsible for all of the following: 
  • the pre-production, principal photography, post-production and delivery of the programme on completion;
  • actively engaging in production planning and decision-making during the pre-production, principal photography and post-production stages of the programme; 
  • directly negotiating, contracting and paying for rights, goods and services in relation to the programme.
These requirements are relaxed in respect of qualifying co-productions.

The tax benefit

Where a television production company is profitable, the HTR claim reduces its tax liability by up to an additional 15.2% of the qualifying costs. 
Where a company is loss-making, or doesn’t pay corporation tax (for example, due to prior year losses), a tax credit at a rate of up to 20% of the qualifying costs is repayable to the company.

What television programmes are eligible for tax relief?

To qualify for HTR a television programme must meet all of the following conditions:
  • it must be intended for broadcast;
  • it must be a drama, comedy or documentary;
  • it must be certified as a British television programme;
  • at least 10% of the ‘core expenditure’ on the production must be spent on goods or services that are provided from within the UK;
  • the average ‘core expenditure’ per hour of production length isn’t less than £1 million per hour;
  • the slot length in relation to the programme must be greater than 30 minutes.
To be considered a British television programme, it must pass a cultural test or qualify through an internationally agreed co-production treaty – certifying that the production is a British television programme. In all cases, formal certification is required to qualify. 

Certification and qualification is administered by the British Film Institute (BFI) on behalf of the Department for Digital, Culture, Media and Sport.

The television programme will not qualify for HTR if it is any of the following:
  • an advertisement or promotional programme;
  • a news, current affairs or discussion programme;
  • a quiz or game show, panel show, variety show, or similar programme;
  • a programme consisting of or including an element of competition or contest;
  • a broadcast of live events, including theatrical and artistic performance;
  • produced for training purposes.
What costs can be included in your claim?

Core expenditure eligible for the enhanced tax deduction includes expenditure on pre-production, principal photography and post-production incurred from the start of the development until the final delivery of the completed television programme.

Expenditure on development, distribution or other non-production activities isn’t eligible for HTR.

If I claim HTR, can I also claim R&D tax relief?

Yes, companies that claim HTR may also claim R&D tax relief in certain circumstances. However, where a small or medium-sized (SME) company claims HTR in respect of a project, it cannot claim SME R&D tax relief on the same project, as two sets of state aid reliefs cannot be claimed on the same project.

For companies which carry out R&D and claim under the Research and Development Expenditure Credit (RDEC) scheme, the rules are different. This is because R&D tax relief claimed under the RDEC scheme isn’t state aid, and therefore the areas of research and development may be eligible for relief under both the HTR and RDEC schemes.  

How we can help

Our specialist team can assist you to structure your entity to ensure that it qualifies for relief, consider which of your television programmes qualify, identify the costs that are eligible for relief and manage the application process on your behalf. 

In addition, we can assist you to optimise the tax relief claims, by identifying costs eligible for RDEC as well as HTR.

If you require any advice on the matters noted above, please contact Aimee Griffiths.

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