Animation Developer Guide 9: Animation Tax Relief Claims

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Introduction

Animation Tax Relief (ATR) is a creative industry tax relief for Animation Development Companies (ADC) which was introduced in April 2014. You can claim ATR up to 2 years after a qualifying accounting period end.

Qualifying Rules

Your company qualifies for and can claim creative industry tax reliefs if it is:

  • liable to Corporation Tax
  • directly involved in the production and development of an Animation Programme

Eligibility

Your company will be entitled to claim ATR if the Animation is British and:
• the programme is intended for broadcast – this includes streaming online
• at least 51% of the core expenditure is on animation
• at least 10% of the core costs relate to activities in the UK

If your company qualifies to claim ATR your company is also entitled to:
• an additional deduction in computing its taxable profits
• where that additional deduction results in a loss, to surrender losses for a payable tax credit

The ‘Cultural Test’

To qualify for the creative industry tax reliefs all animation programmes must pass a cultural test with the BFI, certifying that the production is a British animation programme.

Information you will need

1. Confirmation of the start date and end date of the development of each animation programme subject to a ATR claim.
2. A copy of the interim or final certificate issued by the British Film Institute for each animation programme under development during the accounting period, which confirms a programme is culturally British.
3. Details of estimated and actual income for each animation programme under development, which is subject to a ATR claim.
4. Details of estimated and actual expenditure incurred on the development of each programme.

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Disclaimer: This information is intended for guidance purposes only and we recommend that you take specific advice before taking any action or relying on these notes. Plus Accounting is a trading name of Feist Hedgethorne Limited. Registered to carry out Audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.

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