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UK Screen Alliance, Animation UK welcome consultation on screen sector tax relief

Industry bodies The UK Screen Alliance and Animation UK have welcomed the government’s consultation on screen sector tax reliefs, as announced in the Chancellor of the Exchequer’s Autumn Statement yesterday.

Kate O’Connor

In his statement, UK Chancellor of the Exchequer Jeremy Hunt said the government will consult on a series of proposals that will go further to incentivise the production of culturally British content and support the growth of the audiovisual sector to continue to thrive in the UK.

The UK Screen Alliance and Animation UK have campaigned for the reform of tax reliefs for several years, proposing that the rate of relief should be increased above 25% to reflect the higher rates of incentives available in competitor countries.

According to Animation UK, the lack of a competitive rate of relief in the UK is allowing hundreds of millions of pounds of production to be taken out of the country in order for producers to receive a better incentive abroad.

“The animation industry has an international reputation for creative and technical excellence. We operate globally in an industry worth an estimated US$2.5bn. With the right investment, support for IP retention and more competitive tax relief we can support growth, create jobs and gain an increased market share,” said Kate O’Connor, executive chair of Animation UK.

Neil Hatton

“Our competitors have significantly increased their tax relief and investment. Quite simply, despite our excellence, we are not competing on a level playing field and we look forward to the opportunity to feed into this important consultation.”

The UK government has acknowledged that there is a perception that the 80% cap on qualifying expenditure encourages the more portable aspects of production, such as visual effects, to move abroad and said it will consult on the removal of the cap.

Neil Hatton, CEO of The UK Screen Alliance, said: “The 80% cap is a major inhibiting factor to the growth of our highly creative VFX industry, with many UK-founded companies prioritising investment abroad, rather than in the UK.

“We have made proposals to government to neutralise the effects of the cap, so we welcome the opportunity to further these discussions, with the intent to allow productions which have filmed here and have ‘capped out’ of relief, to be incentivised to remain in the UK for the VFX as well.”

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