Working with Creative Industries
According to figures from the Department for Culture, Media & Sports, in 2022 music, performance and visual arts contributed an estimated £11.5 billion to the UK economy. The economic output of the sector saw a large decrease in 2020 because of the coronavirus pandemic. However, by 2022, it had recovered to above its 2019 level.
The Government has various tax reliefs available to companies within the creative industries – similar to the Research & Development (R&D) tax reliefs. These Creative Industries Tax Reliefs are aimed at companies operating in areas including television production, theatres, museums and orchestra production companies.
From 1 January this year, some new reliefs were introduced, namely the Audio-Visual Expenditure Credit (AVEC), which replaced Film Tax Relief, High-End TV Tax Relief, Animation Tax Relief and Children’s TV Tax Relief; and the Video Games Expenditure Credit (VGEC), which replaced Video Games Relief. Companies claiming VGEC or AVEC can benefit from tax relief at 34% or 39% by adding that percentage of their expenditure to their taxable profits and then deducting the same amount from their corporation tax liability.
Here at Lewis & Co, we provide our accountancy services to a number of businesses and individuals involved in the creative industries – including a music school, DJs, a film production company, actors and singers. We also support a company which provides wigs and costumes.
While in many ways, these individuals and companies are like any other business, their work can sometimes be erratic, so we can support them with their business planning to make their finances more stable.
Actors, for instance, might also be making regular payments to agents, so we can advise them on any tax implications of that. Also, in one instance, we also provided support to the parents of a child actor, which included liaising with HMRC, as they weren’t old enough to have yet been issued with a National Insurance number.
We are also called upon to help clients in the creative sector with what they can claim for in terms of expenses etc – as some are often expected to travel a fair bit and be away from home for periods of time.
If you work in the creative industry and would like to talk to an accountancy firm which understands your business, give us a call on: 01892 513515 or email: info@lewisandco.biz