Audio-visual (AV) tax reliefs have been a huge success story for our Creative Industries. AV tax reliefs have fuelled growth in our regional economies, created jobs right across the UK and attracted record levels of inward investment. They have undoubtedly helped to make the UK one of the best places in the world to produce Film, High-End TV (HETV), Animation TV, Children’s TV and Video Games – and attracted billions of pounds in private sector infrastructure investment to the UK.
Key to this success has been the stability of our AV tax relief regime. The work done by successive governments to demonstrate the UK’s commitment to the regime has been vital in providing certainty and instilling confidence. International investors cite this is a key reason for choosing the UK over other countries, even when the headline rate of relief elsewhere may be higher.
While the Government consultation aims to “simplify and modernise the reliefs, boost growth in the sectors and ensure the reliefs remain sustainable”, the process also generates a degree of uncertainty, which must be minimised and resolved swiftly.
As the Government considers possible changes to the regime, it should recognise the changing global environment in relation to AV tax reliefs. Several countries are becoming increasingly competitive in this space – seeking to replicate the success of the UK’s creative tax relief system. The leading role taken by the UK in establishing and developing its reliefs must not give way to complacency.
Our submission to the consultation, produced in consultation with members, sets out the opportunities to enhance current AV reliefs, but also significant risks in making changes that could have unintended consequences.