Is your creative business missing out on an invaluable tax relief?

Whether it’s our renowned theaters or vibrant galleries, creativity is at the heart of our region’s culture. Despite recent years of prosperity and success, the COVID19 pandemic has hit the industry hard with 2000 jobs on the line in our region alone.

Now, as businesses look to recover, many creative organisations will be looking for new avenues of funding. Creative Industries Tax Relief can open new doors when it comes to cashflow. The relief spans across eight different subsectors, and unlike Governmental loans, it doesn’t have to be repaid.

Relief on the rise

The latest statistics show that the tax relief ploughed £1.11bn into the Creative Industries in 2019/20 - an uplift of £30m on the year previous.

It’s great to see that more organisations are taking advantage of this initiative. I’ve seen firsthand the impact it can have on creative organisations of all sizes. Not only will it help creativity flourish in our region, but it will also act as a real buoyancy aid in these times of uncertainty.

Who is missing out?

Despite the uplift in relief, it’s apparent a huge number of businesses are still missing out. This is especially relevant when it comes to Museums and Galleries Exhibitions Tax Relief (MGETR).

MGETR still has the lowest figures across all eight subsectors of relief, with museums and galleries claiming only £20m since its inception in 2017. This might sound like a lot, but when you consider that the Treasury originally predicted that the relief would cost £30m per year, the figures are somewhat disappointing to say the least.

With some of the most well-known museums having closed their doors for almost half of the year and visitor numbers being limited, museums and galleries are facing a whole raft of cashflow challenges at present.

MGETR offers organisations the opportunity to ease some of this pressure, with the average claim coming in at £15k. This could be a vital opportunity to reinvest during these uncertain times.

Supporting you through uncertain times

By offering eligible businesses a tax relief of up to 25% of qualifying costs, claims on the relief can act as a real lifeline during these uncertain times. Especially for those who have been left in particularly precarious positons, like the theatre industry for example.

Since March, 15,000 theatrical productions have been cancelled and over £300m has been lost in box office profit, and now as theatre doors are permitted to reopen, production companies are facing new struggles. Productions need at least 70% of seats to be filled to break even, but with social distancing dictating a 1 metre distance between audience members, it’s a balancing act which will be impossible for many theatres.

Despite this, local theatres are still adapting to the times by delivering virtual tours and streaming productions online. It’s great to see that theatres are taking an innovative approach towards these adverse times.

Overall, claims on Theatre Tax Relief are slowly rising, which is a really positive sign, as the relief could really help nurture these forward-thinking ideas, or offer a lifeline to help keep companies afloat as we look towards the year ahead.

The road ahead

As we enter the biggest recession on record, it’s time for creative organisations to plan ahead in order to place themselves in the most resilient position possible.

Consulting your advisors on Creative Industries Tax Relief to ensure you get the most out of your claim is crucial. Even if you’ve submitted a claim already, it may be worth getting a second opinion to ensure you’ve maximised the relief available to you. If you have any queries about the relief, we’re on hand to support you. Get in touch to see how we can help.