A consultation announced today about reliefs for animation, high-end TV and video games requires interaction between taxation experts and those in the creative industries if it is to be availed of successfully, according to a leading tax expert.
ICAS Director of Corporate and International Taxation,
Elspeth Orcharton said that identifying what kinds of activities qualified for
the reliefs may present challenges.
In March’s Budget, the Chancellor announced plans to
introduce tax reliefs aimed at digital animation, TV and video games.
In a statement to coincide with today’s launch of the consultation,
George Osborne said that the reliefs would be the most generous available anywhere.
“High-end TV, animation and video games production are
exactly the kind of innovative, high-tech industries at which this country
excels,” Osborne said.
However, determining exactly the kinds of activities that
qualify for relief is likely to present challenges, according to Orcharton.
“These will be complex reliefs – there are three separate
reliefs, which are likely to be based on the same model as film tax relief,” she
“Enhanced tax reliefs will be available, but the
definitional problems will be considerable around the qualifying activities and
expenditure for each relief; for example what is “high-end” television, in
Finance Act terminology?
“That these all have to support “culturally British”
productions in order (it seems) to get round European State-aid restrictions,
is another likely area for argument on entitlement.”
Orcharton said that the consultation could lead to
productive engagement and interaction between those with tax expertise and those
is the creative digital industry.
“This really is an industry focussed consultation,” she
said. “As with research and development tax credits, the real impact will be
when those with knowledge of the tax system work with those who understand some
of the latest digital and computer technologies, both in the business sector
“If those in the industries affected want to pay less tax in
future, they’re going to have to supply the supporting evidence to HMRC on the
impact. Hopefully they will feel incentivised to do so.”
ICAS is aiming to submit representations to the
consultation, which closes on 10 September, but comments are welcome to