• For scripted television projects with a minimum core expenditure of £1 million per broadcast hour, the TV Production Company (TPC) can claim a payable cash rebate of up to 25% on UK qualifying expenditure.
• Individual episodes of 30 minutes or less can qualify for the Tax Relief when commissioned together, however the £1 million average core spend per slot hour requirement would still need to be met (e.g. six 25 minute episodes commissioned together would qualify as long as the average core spend was at least 1 million per slot hour).
• The Tax Relief is capped at 80% of the core expenditure i.e. even if you have 100% UK qualifying expenditure, tax relief is only payable on up to 80%.
• There is no limit on the budget of the TV project or the amount of relief payable within the 80% cap.

The Cultural Test for high-end television is points-based, with sections relating to content, cultural contribution, location, and cast and crew.
Projects need to achieve at least 18 from a possible 35 points.
The sections are:
• Cultural content
• Cultural contribution
• Cultural hubs
• Cultural Practitioners

The UK has film co-production agreements with Australia, Canada, China, France, India, Israel, Jamaica, Morocco, New Zealand, Occupied Palestinian Territories, and South Africa. Of these, Australia, Canada, New Zealand, Israel and the Occupied Palestinian Territories also allow for television programmes.

The UK is also a signatory to the European Convention on Cinematographic Co-production.
• There must be a UK production company responsible for all UK elements of the production from beginning to completion.
• There must be corresponding production companies in the other co-producing party countries.
• There must be a co-producer in each country, and an application lodged in each country.
• The decision will be made jointly by the authority in each country.
• The filmmaking contribution from each country will be in proportion to the finance from each country.

For more information on co-productions, please visit the BFI website

• The TPC responsible for the TV project must be within the UK corporation tax net.
• The TPC must make the arrangements for pre-production, principal photography, VFX, post & delivery.
• It is best to incorporate sooner rather than later so costs can be included towards Tax Relief claim.
• The TPC can be a UK ‘off-the-shelf’ company set up on behalf of an international parent company.
• Work can be sub-contracted as long as this is reflected in the TPC’s accounts.
• Loan-out companies can be used as long as this is reflected in the TPC’s accounts.

• TV projects must be intended for broadcast (including internet).

If there is any doubt about the intention, the following factors would count in favour of the programme being intended for broadcast:

• a finance plan written on the basis that the programme will be broadcast,
• a programme of a type commonly broadcast,
• production in a format suitable for broadcast,
• payment to actors and other participants on terms in line with those prevailing for programmes, and
• the relevant person can demonstrate that, when television production activities began, there was an intention to seek a contract for broadcast of the programme.

For more information, please read HMRC’s detailed guidance.

At least 10% of the television project’s core expenditure must be UK expenditure.

Included costs

• UK qualifying production expenditure is defined as expenditure ‘used or consumed’ in the UK i.e. costs incurred by the TPC on filming activities (pre-production, principal photography, visual effects and post production) that take place within the UK, irrespective of the nationality of the persons carrying out the activity.
• Above-the-line, including actors and directors, is included, irrespective of nationality.
• Core expenditure incurred at a later stage on a project where there are ‘residuals’ to be paid will attract further relief; for example further payments to actors and directors.

Excluded costs

• Bond
• Financing
• Option payments for book rights
• Development
• Entertainment
• Publicity
• E + O insurance
• Capital Expenditure

There is no obligation to carry out all production activity in the UK; it is possible to qualify for the UK High-end Television Relief by carrying out elements of the production process in the UK, e.g. VFX/post or principal photography, as long as the minimum expenditure requirement is met (10%) and all other qualifying criteria are satisfied.

Even if only certain elements of the production process are taking place in the UK e.g. VFX/post, it is essential that the TPC is incorporated in the UK as early as possible in order to qualify for the UK High-end Television Tax Relief.

Also, in addition to VFX/post costs qualifying for the UK High-end Television Tax Relief, the prorated ‘neutral’ costs (qualifying costs which are spread throughout the production process, including senior producers, writers, director, insurances) will also qualify whilst activity is based in the UK i.e. if VFX/post costs amount to 20% of the total core expenditure, 20% of ‘neutral’ costs will also qualify whilst activity is based in the UK.

See case studies below for further information.

• Interim claims can be made – at the conclusion of principal photography, for example – so that pro-rated tax relief can contribute to post-production costs.
• There is no cap on funds available.
• There is no ‘sunset’ date.
• The Tax Relief has been supported and maintained by both leading UK political parties.
• The UK’s planned exit from the European Union will not negatively impact the High-end Television Tax Relief.
• The UK has a range of national and regional filming incentives which can be combined with the High-end Television Tax Relief.
• It is possible to combine the UK High-end Television Tax Relief with incentives from non-UK jurisdictions either under a Production Service Agreement or by qualifying as an official co-production.

You will need:

• DCMS British Film certificate (interim/final) which you will receive via the British Film Institute’s (BFI) Certification Department as a result of qualifying as a British television project
• Statutory accounts
• Tax return

Turnaround Times                                           

For straightforward claims:

• BFI (DCMS) turnaround time is approximately 21 days.
• HM Revenue & Customs turnaround time is approximately 28 days.

Contact us for further quidance on UK tax reliefs and how to qualify as a British production.

Contact the BFI to find out how to apply for certification as a British production under the cultural test or as an official co-production.

Anna Mansi, Head of Certification
+44 (0)20 7173 3214
anna.mansi@bfi.org.uk

Contact HMRC to find out how to apply for UK Creative Sector Tax Reliefs.
Manchester Incentives and Reliefs Team
+44 (0)30 0051 0191
creative.industries@hmrc.gsi.gov.uk

A script that has been developed in the US needs to shoot in a location with sand dunes or tundra for its principal photography, but the studio/producer wants to bring VFX, post, and the soundtrack recording to the UK.

Core expenditure is allocated as follows:

Activities
Preparing costings and shooting schedule- Non-UK
Rehearsals-  Non-UK
Principal Photography- Non-UK
VFX/Post-production/Soundtrack recording- UK
As the project has satisfied all qualifying criteria, the UK FPC is incorporated in the UK during early prep, and VFX/post/soundtrack recording is then carried out in the UK, the costs of which exceed the minimum qualifying spend (10%); VFX/post/soundtrack recording costs will qualify for the UK Film Tax Relief.

In addition to VFX/post costs qualifying for the UK High-end Television Tax Relief, the prorated ‘neutral’ costs (qualifying costs which are spread throughout the production process, including senior producers, writers, director, insurances) will also qualify whilst activity is based in the UK i.e. if VFX/post costs amount to 20% of the total core expenditure, 20% of ‘neutral’ costs will also qualify whilst activity is based in the UK.

This same structure would also apply to any other element of the production process ‘used or consumed’ in UK, e.g. principal photography, as long as the minimum UK-qualifying spend, and all other qualifying criteria are satisfied.

Screenwriter

An TPC decided to make a film of a book in which it holds the film rights. It enlists a screenwriter to prepare the initial drafts of a screenplay and to rework them into a script which is used as the basis of filming.  The nature of the services provided by a screenwriter is the provision of a script.

The script is used as follows:

Activities
Preparing costings and shooting schedule- UK
Rehearsals-  UK
Principal Photography-  Part UK, part overseas
VFX/Post-production/Soundtrack recording- Part UK, part overseas

These costs will be pro-rated, meaning all UK-qualifying spend is eligible for Tax Relief.