Tax relief boosts UK animation

Research released by the British Film Institute (BFI) shows the UK animation industry has experienced significant growth since the introduction of a tax break in 2013.

Kate O’Connor

The BFI found that production expenditure reached an estimated £97.1m (US$127m) in 2016, representing an increase of 27% since the tax relief’s introduction.

Trade association UK Screen Alliance, in partnership with Animation UK, claims the overall contribution of the animation sector to the UK economy is £911.9m once products such as DVDs, books, toys and other L&M are considered.

The BFI report also shows 1,550 jobs directly related to animation production have been created since 2013. This rises to 15,390 jobs supported in the wider value chain once spill-over benefits are factored in, UK Screen Alliance said.

“While this is fantastic news for the industry, there’s still a lot of work ahead to maintain growth in UK animation,” said Kate O’Connor, executive chairman at Animation UK.

“There has been a real bounce in terms of production levels since the tax breaks were introduced in 2013. We’re rightly celebrated for our iconic, humorous, brilliant animation, so the sector’s in good shape. But we can’t be complacent. The sector is facing many unique challenges and we need to ensure we are offering competitive incentives and able to maintain this growth.”

Oli Hyatt, founder at Animation UK and partner at UK-based animation firm Blue Zoo, added: “Animation UK campaigned relentlessly to get the tax breaks in place, so we’re delighted the figures out today prove its success. However, to carry on making world-class animation, we still need to do everything in our power to make sure the sector offers the right conditions for growth, including inward investment, exports and job creation.”

The UK animation tax relief allows an animation production company to claim a tax relief of up to 25% of qualifying expenditure for qualifying animation programmes in the UK.