What does the Spring Budget 2024 mean for the media sector?
At this webinar, Moore Kingston Smith tax experts Leigh Collins and Claire Robinson explored what the changes made by the Chancellor’s recent Spring Budget really means for the media sector, with a focus on both businesses and the financial position of individuals.
Creative Sector Tax Reliefs
The government made several announcements intended to bolster tax reliefs available to the creative sector.
Audio-Visual Expenditure Credit (AVEC)
The AVEC will be amended to increase the expenditure credit for visual effects costs from 34% to 39% from April 2025, bringing it in line with the rate of AVEC which applies to animation and children’s TV. The 80% cap for qualifying expenditure will also be removed for the cost of visual effects. A consultation on the types of expenditure to be covered by these changes will be published in due course
UK Independent Film Tax Credit
The Chancellor announced an extension to the AVEC scheme for films with budgets under £15 million which meet the requirements of a new British Film Institute test. Qualifying expenditure on these films will give rise to an enhanced 53% tax credit from 1 April 2024 onwards, where principal photography started from this date.
Theatres, orchestras, museums and galleries
The government has confirmed that the rates of tax relief which apply to Theatre Tax Relief, Orchestra Tax Relief, Museums and Galleries Exhibition Tax Relief will be permanently set at 40% for non-touring productions and 45% for touring and all orchestra productions from 1 April 2025. The sunset clause for Museums and Galleries Exhibition Tax Relief will be removed, such that it becomes a permanent tax relief with no expiration date.
Moore Kingston Smith comment
These changes will all undoubtedly be welcomed by those in the various specific industries to which they relate. The fact that the 80% cap on qualifying expenditure is now being removed in one specific area may give hope that it could lead to a relaxation of the rules more widely. The new independent film tax credit will provide much needed support to a sector which has struggled against rising production costs and competition from inward investment. The removal of the sunset clause for MGETR is an expression of Treasury support for the sector and will bring greater certainty for future exhibitions, where securing tax relief may well be the difference between whether an exhibition will go ahead or not.
Contact us for more information or click here for the full Moore Kingston Smith analysis of the Spring Budget.