As announced at Spring Budget 2023, the government will legislate in Finance Bill 2023-24 to reform the film, TV and video games tax reliefs to refundable expenditure credits instead of additional deductions from 1 April 2024. The design of the expenditure credits will be based on the RDEC. Full details of the expenditure credits will be published alongside draft legislation in summer 2023.
The government will legislate two expenditure credits:
Audio-Visual Expenditure Credit - to cover the four existing film and TV tax reliefs. The existing specific eligibility criteria of each relief will be preserved.
Video Games Expenditure Credit.
Video games, film and high-end TV will have a rate of 34%.
Animation and children’s TV will have a rate of 39%.
The reform to expenditure credits will change the way that relief is calculated. The expenditure credits will be calculated directly from qualifying expenditure instead of being an adjustment to the company’s taxable profit as under the existing regime.
NAZALI TAX & LEGAL