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Generous tax reliefs

Generous tax reliefs

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Cash Incentives

Tax Allowances for Creative, Digital, and Tech Companies in the UK

Production and businesses based in the Fife Tay region qualify for the UK’s creative tax reliefs that are seen as the most transparent and inclusive in the world, with payable cash rebates of up to 29.25% on qualifying UK expenditure.

Productions are advised to engage with the British Film Institute (BFI) or the British Film Commission (BFC). They can provide guidance on the UK’s competitive and inclusive tax reliefs for qualifying films and high-end TV (HETV). TayScreen can help you to engage with them.

Reliefs are available for production of films, high-end TV, animation, children's TV, VFX and games. There are also tax incentives for Research & Development (R&D). 
 

The UK offers a range of tax reliefs and allowances aimed at fostering growth and innovation within the creative, digital, and tech sectors. These incentives are designed to reduce the financial burden on businesses engaging in activities such as research and development, production of creative content, and technological innovation. Below is an overview of the key tax reliefs available to companies in these sectors.

Research and Development (R&D) Tax Credits

R&D Tax Credits are a major incentive for companies investing in innovation. These credits can significantly reduce a company's tax bill or provide a cash refund. The scheme is divided into two main parts:

  • Small and Medium-sized Enterprises (SMEs): SMEs can claim up to 33.35% of their qualifying R&D expenditure as a cash credit if they are loss-making, and up to 24.7% in tax savings if they are profit-making.
  • Research and Development Expenditure Credit (RDEC): Large companies can benefit from a taxable credit of 13% of qualifying R&D expenditure, roughly equivalent to a net tax saving of 10.5%​ (KPMG)​​ (Deloitte United States)​.
Patent Box

The Patent Box regime allows companies to apply a reduced 10% Corporation Tax rate on profits earned from patented inventions and certain other IP rights. To qualify, a company must:

  • Be liable to Corporation Tax.
  • Own or exclusively license-in patents granted by the UK Intellectual Property Office, European Patent Office, or certain other EEA countries.
  • Have undertaken qualifying development on the patents​ (GOV.UK)​​ (KPMG)​.

    Read more about R&D Tax Credits/Incentives.

Creative Industry Tax Reliefs

The UK offers a range of tax reliefs for different segments of the creative industries:

  • Film Tax Relief (FTR): Allows film production companies to claim a cash rebate of up to 25% of UK qualifying expenditure​ (BDO UK )​.
  • Animation Tax Relief (ATR): Provides a rebate of up to 25% of UK qualifying expenditure for animation production​ (KPMG)​.
  • High-end Television Tax Relief (HTR): Available for high-budget TV shows, offering a rebate of up to 25% of UK qualifying expenditure​ (KPMG)​.
  • Video Games Tax Relief (VGTR): Allows video game developers to claim up to 20% of qualifying expenditure​ (GOV.UK)​​ (Deloitte United States)​.
  • Children’s Television Tax Relief (CTR): Similar to ATR and HTR, but specifically for children's programming​ (BDO UK )​.

    Read more about Creative Industry Tax Reliefs.

Enhanced Capital Allowances (ECAs)

Enhanced Capital Allowances allow companies to claim 100% first-year relief on investments in energy-efficient plant and machinery. This incentive is particularly beneficial for tech companies investing in new hardware and equipment​ (KPMG)​.

Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS)

These schemes provide tax relief to investors who buy shares in small, early-stage companies. SEIS offers up to 50% tax relief on investments, while EIS provides up to 30% tax relief. These schemes help creative and tech startups to attract investment​ (SeedLegals)​​ (Vestd)​.

Read more about EIS and SEIS

 

The UK offers a variety of tax reliefs and allowances tailored to support creative, digital, and tech companies. These incentives not only help reduce the financial burden on businesses but also promote innovation and growth within these dynamic sectors. Companies should consult with tax advisers to ensure they are maximizing their claims and staying compliant with the latest regulations.

For more detailed guidance on these tax allowances, there are extensive resources provided by the UK Government and specialised advisory firms like Thornton's Law, Henderson Loggie, KPMG, Deloitte, and BDO.