Further good news for our industry was announced today.
Reduction of the minimum expenditure requirement from 25% to 10%.
An extension to the Skills investment fund, meaning more support for animation training.
Supper for the creative sector and the media.
- 1.112 The creative industries deliver both cultural and economic benefits to the UK. The government has introduced new tax reliefs for high-end television, video games, animation and theatre, and has expanded the film tax relief. These reliefs have been highly successful in encouraging investment. To further encourage growth in the sector the government will:
- increase the rate of film tax relief to 25% for all qualifying expenditure, and extend the high-end television tax relief by reducing the minimum UK expenditure requirement from 25% to 10% and modernising the cultural test
- introduce a new children’s television tax relief from April 2015, which will include children’s programmes that are game shows or competitions
- introduce a new orchestra tax relief from April 2016 at a rate of 25%
- extend the Skills Investment Fund, providing £4 million to ensure that it can continue to match fund support for training and development in film, television, visual effects, video games and animation for a further two years
- promote a vibrant business environment for new and growing video games companies across the UK by committing £4 million to a new Video Games Prototype Fund over the next 4 years; this fund is designed to aid access to finance and business support, and to target games development talent
BFI to administer tax relief cultural test
Following consultation the Government has now formally appointed the
British Film Institute (BFI) to expand the existing Certification Unit
to cover all 4 creative content tax reliefs (film, high-end
television, animation and video games). Contact details will be
provided in due course. To this end, vacancies for Analysts have gone up on the BFI website:
The Government is in the process of notifying the new creative sector
tax reliefs with the European Commission and will provide an update on
State aid progress to interested parties at the earliest opportunity.
Creative industry tax credits update
Corporation Tax relief for the animation, high end TV and video games
industries, ('creative industry tax credits') is available from 1
April 2013, as announced in the 2012 Budget.
As these reliefs closely follow the existing Film Tax Relief, HM
Revenue & Customs (HMRC) is expanding the existing Film Tax Unit to
cover the new creative industry tax reliefs as well as film.
As for film the creative industry tax credits need State aid approval
and the UK Government has submitted State aid notifications for each
relief on the basis of a Cultural test. If State aid approval is
granted, the legislation will be included in the Finance Act 2013
subject to it receiving Parliamentary assent in summer 2013.
The Creative industries team will from 1 April 2013:
- accept claims for the reliefs
- assess these claims (subject to State aid approval)
- provide advice on the reliefs to companies and their
representatives within these industries
The team is based in Manchester and specific contact details will be
issued before 1 April 2013. Guidance incorporating all Creative
Industry Reliefs will be published on HMRC’s web page when all details
Animation UK has been shortlisted for Trade Body of the Year at the Public Affairs News Awards
We will be up against the Airport Operators Association, the Energy Networks Association and TIGA.
Seems a little premature doesn't It, but hopefully we bring home the silverware as it will raise our profile, and will be a small reward for all the effort you have all put in over the last few years, while we wait for the BIG reward in April!
Consultation opens on cultural test for Video Games, Animation and High-End TV
Industry and Stakeholder opinion sought to aid introduction of tax reliefs for the creative sector.
In the March 2012 Budget, the Chancellor announced that the Government will introduce corporation tax reliefs for the animation, high-end television and video games industries from April 2013, subject to State Aid approval from the European Commission.
We are now seeking views on a proposed cultural test that will identify culturally British video games, animation and high end television that might be considered eligible for the new tax relief.
“Government is committed to supporting these creative and dynamic sectors by introducing tax reliefs for these industries,” said Creative Industries Minister Ed Vaizey. “The film tax relief has been a huge success and I encourage all those with a vested interest in the animation, high-end television and video games industries to take part in this exercise, and make sure your views are known.”
Have your say on:
The deadline for consultation responses is 29 October 2012.
Animation Tax Break Consultation
With the Tax break consultation in full swing I'm pleased to announce
the following people have been selected by HM Treasury to be on the
working group for the "Animation Tax Credit".
- 1. PACT, Emily Davidson
- 2. Baby cow, Tim Searle
- 3. Aardman, Kerry Lock
- 4. Animation Alliance and Lupus, Ruth Fielding
- 5. Animation UK and Blue Zoo, Daniel Isman
- 6. Nickelodeon, Michael Fleisher
- 7. Disney, Teresa Rogers
- 8. Collingwood O'Hare productions, Tony Collingwood
Of course there are way everyone can be involved in the consultation
and we will be putting up advice and suggestion for this presently.
Oli Hyatt, Chair of Animation UK
A meeting was held on Monday February 13th at the Treasury with; George Osborne, David Gauke, Edward Troup, Ed Odell, as well as Ed Vaizey and Tim Scott representing the DCMS, Oli Hyatt representing Animation UK and Robert Kenny & Tim Suter, the co-authors of the Animation UK report were also in attendance.
This was the meeting that all the hard work over the past 2 years has been building up to.
We are immensely proud of how far we have come and how much we have achieved in what is in political terms a very short space of time. Ed Vaizey was amazed at our ability to get all the top treasury officials in a room 4 weeks before the budget.
The meeting was positive and productive. It began by Oli Hyatt setting out the scene in some detail about where the industry has come from and where it is heading, using the arguments that everybody within the industry knows only too well.
The issues discussed were; growth, inward investment, IP, jobs, children, and the tax distortion caused by overseas tax incentives compared to the UK tax regime.
We have given ourselves the best possible chance and we are firmly on the agenda. The treasury are going to give our industry very careful consideration.
We came away feeling hugely positive about the whole thing, we are certain we are now past the "they are just paying us lip service" argument.
We now look towards the March 21st budget announcement.
Oli Hyatt Chair of Animation UK said,
"Meeting with the Chancellor of the Exchequer, the DCMS and top Treasury officials only four weeks before the budget to discuss a proposed animation tax credit, shows what a huge way we have come. The government and civil servants said we had suffered in the past from being "hugely under represented". They now understand our issues and know only too well the value of increasing and retaining IP in the UK and the inward investment that could come from a tax credit for the Animation industry, as well as the cultural and educational benefits for the millions of children that watch our shows. I believe we presented a very convincing argument"
Oli added a message for Animation producers.
"Don't pack you bags! Sell your ferry tickets to Ireland, refund your shuttle tickets to France and cancel your flights to Canada! Pop the kettle on and have one last cup of very British Tea and wait to see if the Government will help our world beating animation talent thrive on March 21st"
Time to take action
Write a letter
With the internal cogs of parliament slowly turning and MP's heads slowly being turned to our cause, we need to keep up pressure and awareness.
Please support our industry by Sending a letter to your MP, we have attached a template letter here but would be really useful if you could add small paragraph on exactly how it effects your business. Why not ask for a meeting with them, we will be able to send an animation UK rep with you I hope so you have a person with all the facts to hand.
I always thought sending a letter would make no difference but it really does and has got us in to meet some really influential people, so please don't ignore this opportunity.
Download letter template
Vote for our cause
Please could you also go to: http://uservoice.com/a/3jVKt its 38 degrees campaign website, but you can get people to email their MPs in support of a campaign. They have had huge success so far and Mark Filed MP is trying to get our campaign nominated by the site - we just need to get enough votes. so please sign up it takes 2 mins.
Animation UK Report Launched
Oli Hyatt, Chairman ANIMATION UK comments, “When I started this process a year ago I was amazed at how quickly our industry was eroding. We are a small but world class industry that punches high above its weight. This report confirms what we all suspected; our industry has a very unique set of problems which means we are unable to compete on a level playing field with the rest of the world.
This body of work is the most detailed report to date and clearly sets out how our industry works, where the market fails and highlights a range of solutions that will help us to continue to produce the most sought after animation brands in the world. Ignoring this will lead to the continued erosion of I.P. and talent from this country.
"We urge the government to work with us to find the correct solution for an industry that is ready for growth"
Meetings with Nick & Vince
Animation UK Chairman Oli Hyatt accompanied, Blue-Zoo Managing Director Tom Box and Producer Vicki King for a meeting with their local Twickenham MP Vince Cable to explain the problems the animation industry is facing. A copy of our report was presented and he was asked for his help to bring about a change that can secure the future of our industry.
Tom Box said, "It’s clear from the meeting with Vince that he was unaware of the nature of the problems facing our industry. However he is supportive and we have high hopes that he can champion our cause."
Also, Oli with Finger Industries and Redstar3d met with Nick Clegg at his local constituency surgeries. Ben Smith from Redstar3d explained the benefits he currently gets from the current film tax break system. Jonny Ford and Marcus Kenyon from FInger Industries talked through the scale of work that businesses in Sheffield have missed out on including how much rights they have had to give away to get a show made and the resultant knock on effects of not earning anything from the IP.
Nick consumes much of the content we provide and said that a trip to Peppa Pig World with his family was imminent! He was surprised to hear the industry was shrinking at such an alarming rate, and was empathetic with our cause. We hope that after reading our report that he may wish to help us find a solution to get us on a level playing field with our many international competitors.
Oli Hyatt said, "It was great to meet Nick and he quickly grasped all the issues surrounding our industry. While we understand the current state of the economy doesn't leave much room for supporting new initiatives we think that there was real understanding that a small change now could make a big difference to UK animation"
Securing the Future of UK Animation
My constituency is best known for containing in Westminster and the City respectively our nation’s political and financial heart. But it is also spiritual home to a globally competitive creative sector in Soho and the West End that includes the film, music, television, theatre and animation industries. With our success in design, our expertise in information technology and our originality in film and theatre, creative industries arguably rank as the next most important overseas economic driving force after our financial services industry.
Indeed, after the tumultuous events of the past few years in the banking sector, creative industries offer one of the great white hopes for economic growth.
In terms of quality, humour and inventiveness, the British animation industry in particular is second to none. Past success in this field has been such that characters like Aardman’s Wallace and Gromit have become part of our national heritage. They are also adored worldwide, acting as ambassadors that embody the spirit of our nation.
But many of our family favourites have moved abroad to be animated by foreign production companies. Why? Cheaper overseas labour provides part of the answer. But bigger than that have been the huge funding incentives in terms of tax breaks and creative funds in other countries that make it nearly impossible for UK companies to compete. Now nearly every nation in the world with an animation industry is offering government-backed incentives to attract animation work.
Put simply, there is no level playing field. Price and product have become secondary to cashflow. The corollary is that animators can waste years putting together funding packages in the UK before often having to resort to co-production with a business operating outside the country, losing a significant proportion of IP rights in the process.
Combine that with a massive reduction in children’s broadcasting and a drop in the prices for programming because of the junk food advertising ban, and we are left to rely solely on the UK’s edge in talent to keep the animation industry afloat.
Yet if we allow this industry to be eroded, we could face an exodus of opportunity from our shores. Skilled young talent may be driven abroad; we could lose the chance to exploit highly lucrative ancillary licensed products; we may see the leaching of expertise, creating a skills dearth in complementary industries such as post-production; and we risk undermining our cultural heritage. Indeed it is precisely because of the vast opportunities that flow from a thriving animation sector that other nations are so keen to attract the business.
The government has a unique opportunity to support the animation industry at this critical juncture in its history. I have been working with dynamic industry players on this issue for over two years now, and have been consistently taken aback by their passion and drive. In producing this comprehensive report, Animation UK has provided us with a physical expression of that passion and proved via a conservative estimate that assistance in this area could lead to a net gain for HM Treasury.
Our animators have never wanted handouts. They are confident that they have the skill, flair and ideas to attract work. Nor do they argue against the free market. The problem lies in the fact that at the moment the market is far from free.
The government has been consistent in espousing its support for the creative industries. Here is an?opportunity to turn a sympathetic ear into a lasting difference for British animators. Their case now deserves a thorough hearing.
Mark Field MP, Cities of London & Westminster
Miles Bullough, Head of Broadcast at Aardman wrote a blog earlier this year following a visit from the Prime Minister to discuss tax credits for kids TV. The blog can be found here digitalmiles with a summary below.
The blog discusses how many other countries provide government support in the form of tax credits and subsidy to TV producers to encourage indigenous production. Though the UK provides a tax credit to the British film industry this has not been extended to kids TV. The BBC is the only substantial UK commissioner of kids’ programmes but have budget pressures of their own. Production is now moving overseas at a very quick rate as producers and buyers look for cost reductions.
Where the UK was once number one for animation we are now falling quickly behind our subsidised international competitors.
The State of the UK Animation Industry
Back in July 2009 BBC breakfast did a feature on Animation in the UK with the help of Oli Hyatt at Blue-Zoo.
At the time of the feature it was estimated that the animation industry was worth over £70 billion dollars globally yet in the past five years the amount of animation produced in the UK had more than halved. Popular animations such as Bob the Builder and Thomas the Tank Engine; quintessentially British were being produced overseas in places such as LA, Taiwan and China as it no longer made economic sense to produce them in the UK. Despite this, The Department of Culture in England have claimed that offering tax breaks for animation would be unfair to the rest of the TV Industry.
Oli commented that the UK was not on a level playing field with the rest of the world and that the UK were already so far behind; on average almost a million pounds on a regular show therefore making it hard to enter the market place.