The UK’s economy depends on innovation, which is why some businesses can claim a reduction on their tax bill if they work in the creative sector. The idea behind these tax incentives is to encourage new projects and cutting-edge technologies.

What tax relief is available for creative businesses?

There are different types of Corporation Tax relief available for creative industry businesses, and each one has different criteria. Knowing which creative tax reliefs are available and how to apply isn’t always easy, so we’ve put together this quick guide to help.

You might already have spotted that we only refer to Corporation Tax relief. Sadly, that does mean these reliefs are only available to companies who pay Corporation Tax, and not to sole traders or general partnerships.

Of course, if you think your business may be eligible but you’re not quite sure or you’ve got any questions, feel free to get in touch.
 

What is the BFI cultural test?

We’ll start here, because the BFI cultural test is central to most of the tax relief and credit schemes available to creative businesses.

Essentially, a business must prove the game, programme, or show that it creates has scored enough points to be certified as British. The British Film Institute (BFI) handles the certification process on behalf of the UK government.

When do I apply for a Cultural Test certificate?

You can request an interim certificate before completing the work. This can be particularly useful if you’re working on a longer project spanning financial years, and need to submit your Company Tax Return.

Once your production, film, programme, or video game is complete, you will need to apply for a final certificate from BFI’s Certification Unit. This is key, because failing to do so means you’ll need to repay any tax relief you’ve already claimed. Make sure you include your final certificate – plus any interim ones – as proof of eligibility when you submit your Company Tax Return.

Creative sector tax relief for television, film, and animation

There are several tax relief schemes available to creative sector businesses which deal with film, television, and animation.

 
If you do use the relief schemes, you’ll claim an additional deduction to reduce your Corporation Tax bill. The deduction is the lower amount of either 80% of your total core costs, or the amount of your UK core costs. ‘Core costs’ refers to what is spent on pre-production, principal photography, and post-production.

Animation Tax Relief (ATR)

Children’s Television Tax Relief (CTR)

 
Game shows, quizzes and other programmes that involve contest or competition are able to claim, but only if the prize money is less than £1,000. Again, if multiple programmes are commissioned together, they’ll be treated as one programme. Learn more about Children’s Television Tax Relief.

Film Tax Relief (FTR)

Film Tax Relief is another popular one, with companies able to claim the tax relief if their project:

• Has passed the British Film Institute’s cultural test and is therefore considered ‘British’
• Incurred at least 10% of the total production costs on UK activities
• Is intended for theatrical release
• Principal photography started on or before 31st March 2025

Find out more about FTR, including eligibility and how to claim, on the Gov.uk website.

High-End Television Tax Relief (HTR)

High-End Television Tax Relief is less well-known but it can make a huge difference – particularly to small production companies.
 

 
If two or more programmes were commissioned together, they’ll be regarded as one program and treated accordingly for tax relief purposes.

Audio-Visual Expenditure Credit

The tax relief system for creative industries is changing. In most cases you won’t be able to claim relief for film, television, and animation projects if production started after 31st March 2025, and the schemes will be closed to everyone from 1st April 2027. You might be able to claim Audio-Visual Expenditure Credit instead.

To be eligible to claim credit, your company must:

• Be responsible for pre-production, principal photography, post-production, and delivery of the completed film or programme
• Be actively engaged in planning and decision-making
• Directly negotiate, contract and pay for rights, goods and services

What you can claim

The Audio-Visual Expenditure Credit basically means you can claim a percentage of your ‘qualifying costs’. Qualifying costs are the lower of either:

• 80% of the total core costs
• The amount of UK core costs

The percentage you claim (the expenditure credit) depends on what sort of production you’re involved in. The tables below show the percentage available.

Expenditure credit for films

Your company can claim the expenditure credit on a film if:

• It’s certified as British by the British Film Institute
• It’s intended for theatrical release
• At least 10% of the ‘core costs’ are related to activities in the UK

The table below explains what percentage of expenditure credit is available for different types of film production.
 

Expenditure credit for TV programmes

Your company can claim the expenditure credit for a TV programme if:

• It’s certified as British by the British Film Institute
• It’s intended for broadcast to the general public — this includes streaming online
• At least 10% of the ‘core costs’ are related to activities in the UK
• The programme is a drama, comedy, documentary, animation or children’s programme

The table below explains what percentage of expenditure credit is available for different types of television production.
 

Relief on business rates for film studios

Known as Film Studio Business Rates Relief, local authorities have started to roll out 40% relief on business rates to eligible film studios in England. The scheme is expected to last until 2034, with more information available here.

Corporation Tax relief for gaming companies

Businesses producing video games in the UK may be able to claim a reduction on their bill for Corporation Tax, but it’s worth mentioning the type of support available is changing. Projects which started the production phase before 31st March 2025 might still be able to use Video Games Tax Relief (VGTR), although this will close to everyone from 1st April 2027. You may be able to get Video Games Expenditure Credits (VGEC) instead.

Video Games Tax Relief (VGTR)

Video Games Tax Relief is a particularly popular type of relief claimed by gaming companies up and down the UK. Under this type of relief you may be able to claim a deduction which reduces the amount of Corporation Tax you need to pay. It will be the lower of either 80% of the game’s total core costs, or the core costs on goods and services provided from the UK and EEA.

To be eligible, your company must have:

• Developed a video game that meets the Cultural Test criteria as being British
• Created a game that is specifically for public sale
• At least 25% of core expenditure (i.e., pre-development, principal photography, and post-development) was incurred on goods or services that come from the UK or European Economic Area (again, all EU countries as well as Liechtenstein, Norway, and Iceland)

Unfortunately, if your company has already claimed Research and Development Tax Relief on a project, you can’t go on to claim VGTR, grants, or any other state aid reliefs on that same project. That said, you may be able to claim other state aid on future projects.

You also won’t be able to claim Video Games Tax Relief if your game:

• Has been designed for marketing, promotional or gambling purposes
• If the production phase started after 31st March 2025

Video Games Expenditure Credits for Corporation Tax

Eligible companies may be able to claim credits if they are directly responsible for design, production, and testing of the game being claimed for. They must also be actively engaged in the planning and decision-making process, and negotiate, contract, and pay for rights, goods, and services.

 
You’ll be able to claim a 34% credit against whichever is lower of 80% of the total core costs, or the UK core costs. The credits are taxed at the main rate of Corporation Tax and then used to pay off your company tax bill, any other tax liabilities you have, or surrendered to other companies in the group. You’ll get a payable credit if there’s any credit left at the end.

You’ll normally qualify to claim Video Games Expenditure Credits on spending incurred from 1st January 2024 as long as the game satisfies the conditions in the table below.
 

Corporation Tax relief for museums, galleries, orchestras, and theatres

There are different types of tax relief schemes available to museums and galleries for exhibitions, orchestras, and theatres.

Museums and Galleries Exhibition Tax Relief (MGETR)

Any eligible company which curates a public display, show, or exhibition of an organised collection of objects or works that have cultural, historic, scientific, or artistic interest can claim MGETR. It doesn’t even have to be many items – it could just be one.

Unlike many of the other Creative Sector Tax Reliefs, galleries and museums aren’t subject to the cultural test to be eligible.

Orchestra Tax Relief

If you haven’t even heard of Orchestra Tax Relief, you’re not alone – many people haven’t. This government initiative works by allowing instrumental groups to receive a payment from HMRC that equals a percentage of their production costs. Despite the name, any type of instrumental group can claim – not just orchestras.

For more information about eligibility and how to make a claim, see the Claiming Orchestra Tax Relief for Corporation Tax page on the Gov.uk website.

Theatre Tax Relief (TTR)

Theatrical production companies will be able to apply for TTR if:

• The production is “a play, opera, musical, or other dramatic piece” where the singers, actors, dancers, or other performers perform live roles
• At least 25% of the core expenditure your company incurred was spent on goods or services that were provided from within the EEA (plus Lichtenstein, Norway, and Iceland)

See the government’s Theatre Tax Relief Manual for more information and how to apply.

A quick word about State Aid

Creative industry tax reliefs are classed as state aids. This means that if your company receives €500,000 or more in state aid per year, the European Commission publish the details on their website, regardless of what creative industries tax relief you’re claiming.

 
Learn more about our online accounting services to get help with claiming tax relief. Call us on 020 3355 4047 for a chat, and get an instant online quote.