Animation Tax Relief (ATR)

Animation Tax Relief (ATR) is a tax incentive introduced by the UK government to support the animation industry, under the Creative Industry Tax Relief or Creative Industry Tax credit. It allows eligible companies to claim a payable tax credit or reduce their Corporation Tax liability for qualifying animation productions. ATR is part of the UK's broader Creative Industry Tax Reliefs, encouraging investment in the sector and fostering the growth of the animation industry.

In order to claim Animation Tax Relief (ATR) or Payable Tax Credit, your company must be responsible for:

Pre-production

Principal photography

Post-production

Delivery of the completed programme

Your company must also:

Be actively engaged in planning and decision-making

Directly negotiate, contract and pay for rights, goods and services

Animation programmes commissioned together are treated as one programme.

Cultural test

To qualify for creative industry tax reliefs, all animation and television programmes must be certified as British. They must pass a cultural test or qualify through an internationally agreed co-production treaty.

The British Film Institute manages certification and qualification on behalf of the Department for Culture, Media and Sport.

The British Film Institute will issue:

An interim certificate for uncompleted work

A final certificate when production has finished

Your company can claim the relief on an animation programme if:

The programme is certified as British by the British Film Institute

The programme is intended for broadcast — this includes streaming online

At least 51% of the ‘core costs’ are spent on animation

At least 10% of the ‘core costs’ relate to activities in the UK

It started principal photography on or before 31 March 2025

Core costs are what’s been spent on pre-production, principal photography and post-production.

Your company cannot claim the relief if the programme:

Is an advertisement or promotional programme

Is a news, current affairs or discussion programme

Is a quiz or game show, panel show, variety show, or similar programme

Consists of, or includes an element of, competition or contest

Is produced for training purposes

What you can claim

You can claim an additional deduction to reduce your profits or to increase a loss. This reduces the amount of any Corporation Tax you need to pay.

The additional deduction will be the lower of either:

80% of total core costs

The amount of UK core costs

If you make a loss, some or all of this loss can be surrendered for a payable tax credit at a rate of 25%.

When can you claim

You may make, amend or withdraw a claim for Animation Tax Relief up to one year after the company’s filing date.

For accounting periods beginning on or after 1 April 2024, you may make, amend or withdraw a claim for Animation Tax Relief up to 2 years after the end of the period of account the claim relates to.

If you want to discuss Animation Tax Relief (ATR) further, please contact NUMERATE ACCOUNTANTS at 07765838151.