Animation Tax Relief
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Learn more about
Animation Tax Relief
The Animation Tax Relief was first introduced by the government to support the British heritage sector, reflect its values and diversity. The relief allows eligible companies to claim their relief through a reduction of their Corporation Tax bill if submitted before the financial year-end, or you can receive a payable credit based on your qualifying expenditure costs.
Animation Tax Relief Eligibility Criteria
In order to be eligible to claim, your company must be subject to Corporation Tax and it must have been incorporated in the UK or have a lasting institution that is subject to UK’s Corporation Tax rules. Your company must possess a certification from the British Film Institute (BFI), confirming that you have passed the cultural test. For Animation Tax Relief the passing threshold is 16 out of the maximum 31 that you can get. Some sections that you will be assessed on include:
- Cultural contribution
- The content of your project itself
In addition, your production will also have had to be produced with the intention of broadcast which also includes online streaming. Your company must hold the responsibility for what HMRC call ‘core costs’, your core costs include the following aspect of your operations:
- Your pre-production stage
- The principal photography
- The post-production stage
- Delivery of the programme
It is a requirement that 51% (or more) of your core costs must be on the animation itself and a minimum of 10% of your core costs must also be spent in the UK to stimulate the economy. HMRC also requires you to take part in decision-making and planning, as well as actively engaging in contract negotiations and making payments for all stages on production, this includes:
What You Cannot Claim Through Animation Tax Relief
There are a few limiting factors to the incentive:
- You cannot claim if your programme is purely designed promotional or advertisement purposes
- The nature of your programme falls under discussion, current affairs and/or news, a variety show, as well as any programmes that are under the game category
- Your programme must also not be produced for training of any kind
How Much Tax Relief Can I Get?
Benefits Of Animation Tax Relief
The main benefit of the incentive is the fact that there is no cap on how much you can claim from HMRC for your development
Your company is also able to claim additional deductions if you wish to increase your losses or profits in order to reduce the total amount of Corporation Tax that you need to pay
If you are a loss-making company then you will be able to claim a payable tax credit at 25%
How Does Counting King Handle My Claim?
The process is simple:
We will always conduct a discovery meeting to talk you through the incentive, explain our process, and establish whether your company carried out eligible research and development activity.
During the second stage, we will visit your site and conduct informal interviews with key personnel to gain a deeper understand of the business for the technical report. We will also ask for your up-to-date financial data for our in-house analysis.
We will conduct our research and development benefit analysis, where we assess all eligible costs and calculate your maximum benefit.
We will submit your claim to HMRC within 2 weeks of securing all completed documents. HMRC will process your payable credit claim and pay out the benefit within 28 days. In the case of HMRC requiring additional information, Counting King will oversee this process.
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