Animation Tax Relief

The Finance Act 2013 (Now incorporated into CTA 2009 Part 15A) introduced a new relief for the animation industry, Animation Tax Relief.

Companies are entitled to claim Animation Tax Relief on an animation programme if the programme passes the cultural test administered by the BFI.

Animation will include various techniques which include, but are not limited to:

  • hand-drawn illustrations
  • stop-motion or computer generated images rendered in 2D or 3D
  • using photography to generate individual frames as in stop motion

These techniques may be used in conjunction with non-animation cinematographic techniques. If this is the case, the programme will be treated as an animation if 51% of the total core expenditure on the completed programme is spent on animation


Animation Tax Reliefs

It is a common view that claiming Animation Tax relief is all about passing the cultural test. There is a lot more to it than that......


The tax position

For tax purposes only, the legislation:

  • deems that the production of each animation is a separate trade with a start and end date separate to that of the company,
  • describes what income and expenditure is eligible for additional tax relief and circumstances where there are exceptions to the normal rules for income and expenditure, and
  • restricts the use of losses associated with that trade in certain circumstances.

The new rules apply to all relevant programmes that are developed by a Television Production Company

Claiming Animation Tax Relief

Your company will be entitled to claim ATR on an animation programme if:

  • the programme passes the cultural test
  • the programme is intended for broadcast
  • at least 51% of the total core expenditure is on animation
  • at least 10% of the total production costs relate to activities in the UK

Animations commissioned together are treated as one programme.

Your company can’t claim ATR if the programme:

  • is an advertisement or promotional programme
  • is a news, current affairs or discussion programme
  • is a quiz or game show, panel show, variety show, or similar programme
  • consists of, or includes an element of competition or contest
  • broadcasts live events, including theatrical and artistic performance
  • is produced for training purposes

ATR & MMP

The MMP technology consultants are all highly qualified engineers and scientists so they share an understanding and passion for technology. This ensures we can get the best from your team, helping you right through the process, saving you valuable time in making a full and accurate claim

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