Effective January 1, 2024, a comprehensive new tax credits system bolsters support for the United Kingdom’s vibrant film, television, and video game production industries. This transformative initiative, aimed at maximising the sector’s potential and nurturing unique British talent, replaces the previous tax relief framework with the newly established Audio-Visual Expenditure Credit and the Video Games Expenditure Credit.

Enhanced Financial Support: Companies can expect increased tax relief compared to the past system:

• £42,500 additional relief for animation and children’s TV productions per £1 million of qualifying expenditure.
• £5,000 other substitute for high-end TV, film, and video game productions per £1 million of qualifying expenditure.

To ensure equitable application, the animation credit uplift now encompasses television and film productions. Additionally, the new system calculates credits directly from qualifying expenditures, providing greater transparency than adjustments to taxable profits.

Animation and children’s TV productions benefit from a 5.5% increase in credit rate to 39%. Film, high-end TV, and video game productions also see a slight increase, equivalent to approximately 0.5%, with a credit rate of 34%. The new system extends across the United Kingdom, ensuring equitable access to support for all eligible productions.

Recognizing industry concerns, the government allows productions and games in development as of April 1, 2025, to utilise the previous tax relief framework until its official termination on April 1, 2027. The new system reflects extensive consultation with the UK entertainment industry, ensuring alignment with its needs and concerns.

This initiative builds upon the UK’s already robust creative industry, valued at £126 billion, and its position as Europe’s leading video game employment hub with nearly 21,000 professionals.