U.K. Extends Tax Credits to Cover Children’s Live-action TV Shows

LONDON — The U.K. government has confirmed that it will extend its existing production tax credits for film, animation and high-end TV to include children’s live-action programming.

The Chancellor of the Exchequer George Osborne, who is in charge of government economic policy, announced the move Wednesday as part of his Autumn Statement, which updates the country’s lawmakers on the government’s economic policy.

“We will help one area of television production that has been in decline, with a new children’s television credit, alongside our new animation credit,” said Osborne. “The government will introduce a new tax relief for children’s television programs from April 2015.”

The kids’ TV tax credit amounts to a 25% saving on 80% of the U.K. production spend.

The tax credit already applies to bigger-budget scripted television shows, but is restricted to programs of more than 30 minutes in length, and with budgets exceeding £1 million ($1.57 million) for each broadcast hour.

There is a separate tax credit for animation intended for broadcast, which again amounts to a 25% saving on 80% of the U.K. spend. There are no restrictions on budget size or program length.

Producers’ body Pact welcomed the decision.

Pact chief executive, John McVay, said: “Nowhere in the world does better kids’ TV than the U.K. Time and time again, British TV producers have created the most successful, innovative and creative programs for children.

“We have seen how successful a tax break for animation has been and we look forward to the boost it will give to children’s live-action TV – it will make a real difference.”

Pact’s research found that the tax relief for animation, which was introduced in April 2013, has attracted £52 million ($81.5 million) of production spend to the U.K. in its first year.

Valerie Ames, director of production for children’s production company Kindle Entertainment, said: “Prior to the introduction of the tax credit, the U.K. animation industry was really struggling. Children’s live-action TV is in exactly the same state today, with even the most successful companies finding it either impossible to fully finance their productions or impossible to justify the time, effort and cost it takes to get that finance in place.

“The advent of the animation tax credit turned the animation industry around completely; a live-action tax break will similarly make it possible to continue producing our world-renowned British children’s programs.”

Osborne also said Wednesday that the government would look into reducing the minimum U.K. expenditure for high-end television tax relief from 25% to 10%, and “modernize the cultural test” — which defines whether a program is “British” enough — to bring the relief in line with film tax relief.

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