Creative Industry Tax Reliefs (CITR)

Creative businesses in the UK have access to a powerful set of tax reliefs designed to support innovation, culture, and content production. But many eligible businesses aren’t claiming – simply because they don’t realise they qualify.

Creative Industry Tax Reliefs (CITR) are a group of Corporation Tax reliefs available to companies producing qualifying content in areas like film, TV, animation, video games, museums, galleries and theatre. They can offer either a reduction in Corporation Tax or, for loss-making businesses, a cash credit from HMRC.

So, could your business benefit?

What are Creative Industry Tax Reliefs?

Creative Industry Tax Reliefs are a group of eight Corporation Tax reliefs for businesses in specific creative sectors. These are:

• Film Tax Relief (FTR)
• High-End Television Tax Relief (HTR)
• Animation Tax Relief (ATR)
• Children’s Television Tax Relief (CTR)
• Video Games Tax Relief (VGTR)
• Theatre Tax Relief (TTR)
• Orchestra Tax Relief (OTR)
• Museums and Galleries Exhibition Tax Relief (MGETR)

Each scheme has its own rules, but all follow a similar structure: if your company produces eligible content and meets UK cultural and expenditure tests, you can claim additional tax relief on your costs, often leading to a payable tax credit.

What’s the benefit?

Companies can claim up to 25% of qualifying production expenditure back as a cash credit, or use it to reduce their Corporation Tax bill.

Here’s how it typically works:

• If your company is making a profit, the relief reduces your Corporation Tax.
• If you’re making a loss, you may be able to surrender that loss for a payable tax credit from HMRC.

This means the relief can help improve cash flow during production or post-production – a vital lifeline for creative businesses with long lead times.

Who can claim?

To claim, your business must:

• Be liable to UK Corporation Tax
• Be directly involved in the production of eligible content
• Pass the relevant cultural test (administered by the British Film Institute)
• Spend at least 10% of total core costs in the UK

Eligible companies range from independent game developers and TV production houses to theatre companies, animation studios, and even galleries producing touring exhibitions.

You don’t have to be a massive studio to qualify – small, growing creative businesses can still access the relief.

What’s changing in 2025?

The UK government has reformed Creative Industry Tax Reliefs with a new Audio-Visual Expenditure Credit (AVEC)and Video Games Expenditure Credit (VGEC), applying from January 2024 for new productions.

These are designed to simplify the claims process and make the system more generous in some cases.

For example:

• AVEC replaces Film, High-End TV, Animation and Children’s TV tax reliefs
• It offers a credit of 34% of qualifying expenditure for animation and children’s TV, and 39% for other content
• The new regime uses a credit system rather than an additional deduction, making the benefit more transparent

Existing productions can continue under the old rules until April 2027. But new claims should consider whether they fall under the new regime.

Common issues we see

Claiming CITR isn’t always straightforward. We regularly see businesses missing out due to:

• Assuming they’re too small or “not creative enough”
• Failing to pass the cultural test due to missing documentation
• Structuring their business in a way that disqualifies them (e.g. outsourcing too much production)
• Not keeping detailed cost records split between qualifying and non-qualifying expenditure
• Leaving the claim too late (claims must be made within two years of the end of your accounting period)

Getting expert advice early in the production process can make a big difference.

How much could you claim?

Let’s say you’re a small game development company and you’ve spent £500,000 on a new title. If £400,000 of that qualifies under VGTR rules:

• Under the old regime, you could claim 20% to 25% as a cash credit: up to £100,000
• Under the new VGEC regime, you might claim 34%: £136,000

This is real money that can fund your next project or ease cash flow while you’re finishing the current one.