Are you missing out on Creative Industry Tax Relief?
Back in In January 2019, we produced an article on the benefits of the available creative industry tax reliefs, giving an overview of what they are (additional Corporation Tax Relief), who can claim them (a surprisingly wide range), and how Mitchell Charlesworth can help clients take advantage of these tax planning opportunities (contact us for a chat). If that article passed you by, we’d recommend that you take a moment to read through it by clicking here.
At the beginning of August 2019, HMRC released their annual statistics on the total amount of relief given to businesses in the UK in 2018 – 2019, and we’ve set out our findings below.
Overall, the government handed out an additional £200m in creative industry relief, bringing the 2018 – 2019 total to £1.1 billion. These increases largely come from the Film and High-End TV reliefs, which more and more companies are now taking advantage of.
The below table shows the split of the relief between the various types available and the trends from the previous 3 years.
What does this mean for SMEs?
Closer inspection of the figures reveals a clear trend across the board – the main users of the relief tend to be large companies, meaning that this tax planning opportunity is going largely unused within the SME market, where in many instances, it can make a significant difference to ongoing and future activities.
Why is this happening?
As with many reliefs, their existence is not common knowledge and the publicity surrounding these reliefs isn’t as wide ranging as it could be. There’s also a common misconception that making these claims can be heavily administrative and timely, without any significant benefit being obtained. It is also believed that scrutiny from HMRC will be increased as a result of a claim, which from our experience, is not the case.
How can we help?
SMEs who are not currently utilising the creative industry reliefs can make a claim which may be a way for them to generate some extra cash. This can be reviewed retrospectively and result in a refund of Corporation Tax or payment of a cash credit from HMRC.
For advice and guidance on Creative Industries Tax Relief and if it is applicable to your business please contact Phil Hartley for a no obligation conversation.