The U.K. treasury is poised to publish draft legislation on tax breaks for high-end television and animation next week after it was announced that qualifying productions will receive a 25% rebate. It is expected that the measures, detailed in chancellor George Osborne’s Autumn Statement, will work in a similar way to the film tax credits, meaning that eligible programmes can receive a cash rebate of up to a quarter of their overall production budget.
A £1million-an-episode threshold has been widely discussed, but the Treasury has not yet revealed how big a budget a production will need to qualify for tax relief. The figure will likely be revealed in draft legislation on December 11. It will then be consulted on, and put into the Finance Act, which will come into effect in April 2013.
Pact chief executive John McVay said the 25% rebate was a “very good number” and was in line with what the industry was lobbying for. “We’re really pleased the government has listened carefully to the industry,” he added.
In addition, the country’s Department for Culture, Media and Sport is figuring out cultural definitions of British productions or co-productions. This work is crucial to securing European Commission state aid approval. Points are likely to be awarded for cultural content, cultural contribution, cultural hubs and cultural practitioners, according to the proposed model which is largely based on U.K. film tax relief. Productions will have to gain 16 marks out of a maximum of 31 by meeting different criteria within the different areas.
Oli Hyatt, Chair of Animation U.K, which represents U.K.’s Animation production companies, said…
“The tax credits announced by the Chancellor today are exactly what we have lobbied so hard for over the last three years. I am hopeful this will now enable U.K. animation productions currently made outside the U.K. to return to their cultural home, as well as attracting new productions and securing investment from overseas! We have asked to be put on a level playing field with our big rivals from around the world and this announcement goes a long way in achieving this. I now expect the U.K. animation production sector to be truly competitive for the first time. We are pleased that as well as helping business be competitive they have also pledged investment in training. This will really help our small but hard hit industry expand to meet the growing demands that will be put on us over the coming years.”