British producers and media execs are feeling reassured after the UK government announced an overhaul of the region’s film and TV tax reliefs last week. 

Under the new streamlined Audio-Visual Expenditure Credit (AVEC), UK-based kids TV and animation productions are now eligible to claim up to 39% on qualifying expenditures, which is a significant increase from the previous 20% to 25% allowance.

“We’ve been lobbying to increase the children’s tax credit, so we’re very pleased that the government has listened,” says John McVay, chief executive at trade association PACT, adding that this will be crucial for attracting more financing “at a time when it’s very hard to raise funds for children’s content.”

“We need our domestic broadcasters to commission more children’s content,” he emphasizes. “That’s been declining for a number of years. This tax credit should help incentivize that, but we’ll have to wait and see.” 

In a 2018 report, Ofcom estimated that annual spending on homegrown children’s programming by UK public broadcasters had fallen dramatically, from US$142 million in 2006 to US$85 million in 2017.

Then last year, the UK government cut off the Young Audiences Content Fund, a US$62-million program that supported the development of 144 projects (55 of which received broadcast orders) since it was established in 2018.  

These losses were very hard on the local industry, but the tax reforms have started to stir optimism among indies like London’s Emanata Studios (Dennis the Menace), which has been waiting for measures that level the global playing field for British prodcos.

It’s “fantastic news,” says Mark Talbot, the production company’s chief creative officer. “The tax credit should enable us to more readily achieve the budgets we need to produce animation that can rival [the content] coming into the UK from America.” 

There’s similar excitement from Birmingham-based animation studio Threewise Entertainment (The Weatherbies), particularly over the timing of the increased expenditure.  

“As a country with phenomenal talent and a track record of producing global children’s TV hits, the UK was beginning to fall behind the rest of the world with its incentives for homegrown productions and international co-pros,” says Threewise founder and head of content Michael Ford. “This revised credit system would appear to bring the UK into parity with other international regions.”

Bristol-based Wildseed Studios, one of the contributors to the consultation that spurred the changes, welcomes them wholeheartedly.

“There is clearly a lot of detail to be worked out, and we are waiting to see the draft legislation before we get too excited,” says managing director Miles Bullough. “But our initial reaction is that the simplification of the system, and the enhancement to the rate for kids and animation, appear to be set to give a much-needed boost to our sector.”

Image courtesy of Sabrina Mazzeo via Unsplash