Animation Tax Relief
how much you could receive
What Is Animation Tax Relief?
Everything you need to know
The Animation Tax Relief was first introduced by the government to support the British heritage sector, reflect its values and diversity. The relief allows eligible companies to claim their relief through a reduction of their Corporation Tax bill if submitted before the financial year-end, or you can receive a payable credit based on your qualifying expenditure costs.
Animation Tax Relief Eligibility Criteria
In order to be eligible to claim, your company must be subject to Corporation Tax and it must have been incorporated in the UK or have a lasting institution that is subject to UK’s Corporation Tax rules. Your company must possess a certification from the British Film Institute (BFI), confirming that you have passed the cultural test. For Animation Tax Relief the passing threshold is 16 out of the maximum 31 that you can get. Some sections that you will be assessed on include:
- Cultural contribution
- Location
- The content of your project itself
In addition, your production will also have had to be produced with the intention of broadcast which also includes online streaming. Your company must hold the responsibility for what HMRC call ‘core costs’, your core costs include the following aspect of your operations:
- Your pre-production stage
- The principal photography
- The post-production stage
- Delivery of the programme
It is a requirement that 51% (or more) of your core costs must be on the animation itself and a minimum of 10% of your core costs must also be spent in the UK to stimulate the economy. HMRC also requires you to take part in decision-making and planning, as well as actively engaging in contract negotiations and making payments for all stages on production, this includes:
- Rights
- Goods
- Services
What You Cannot Claim Through Animation Tax Relief
There are a few limiting factors to the incentive:
- You cannot claim if your programme is purely designed promotional or advertisement purposes
- The nature of your programme falls under discussion, current affairs and/or news, a variety show, as well as any programmes that are under the game category
- Your programme must also not be produced for training of any kind
How can Churchill Tax help?
Churchill Tax can assess your existing IP portfolio to identify whether there are patented inventions (products or processes) that would qualify for Patent Box. Following the identification of eligible inventions, we will work with your accountant to stream the income and costs relating to each of the qualifying patented inventions. Furthermore, we will then proactively advise on the future streaming and tracking required to continue to benefit from the Patent Box.
- Identify: Encouraging companies to create and commercialise more Intellectual Property within the UK.
- Patented Licence: Once your patent application has been successful, you will be able to claim a lower tax rate on profits generated from exploiting your patented inventions.
- Lower Rate: Pay the lower 10% Corporation tax on profits generated from exploited patented inventions.
COMPLEX TAX INVESTIGATIONS
BOOK A CONSULTATION
Churchill Tax provides all types of tax advice on complex issues to individuals and companies across all sectors. We make the time and effort to understand our client’s businesses and needs and our tax experts have a proactive and flexible approach to helping clients overcoming the challenges they face.
GOT A QUESTION?
If you are looking to action any of these tips in our guide or if have any other queries about tax and planning your finances for your future, our Private Client Tax team are here to help. Get in touch with a member of the team for an initial chat now.
OUR EXPERIENCE
At Churchill Tax we have extensive experience dealing with HMRC Investigations and we regularly deal with Tax Inspectors within HMRC’s Specialist Investigations and Local Compliance Fraud teams. Our people have worked in Tax Investigations teams at ‘Big 4’ accountancy firms, niche tax investigations practices and within HMRC as Tax Inspectors. At Churchill Tax, our personal, friendly and understanding approach ensures that we provide the best possible service at the most competitive prices.
How Much Tax Relief Can I Get?
WHAT WE OFFER
When appointing a Tax specialist to act on your behalf, it’s important to know that you’re in good hands. You need to know that the advisor you appoint has the experience, skills and courage required to achieve the best possible outcome for you.
Our role is as much about supporting our clients personally as it is about providing professional and effective Tax representation. This is why we have implemented facilities such as flexible payment options , that aim to make the process straight forward and stress free.
Have you received a notification of HMRC investigation?
BOOK A CONSULTATION
Churchill Tax provides all types of tax advice on complex issues to individuals and companies across all sectors. We make the time and effort to understand our client’s businesses and needs and our tax experts have a proactive and flexible approach to helping clients overcoming the challenges they face.