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Animation Tax Relief

Animation Tax Relief (ATR) is a government funding incentive to support animation programmes and is currently worth up to 20% of core production costs. ATR is managed by HMRC and claimed as part of the Company Tax Return.

Myriad has been helping UK animators for over a decade. As your ATR partner, our specialist tax advisers and BFI consultants will ensure your claim is accurate, compliant, and optimised.

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Animation Tax Relief

Guide Overview

Below are six simple sections to help you understand what Animation Tax Relief (ATR) is, how it works and whether you’re eligible.

What is Animation Tax Relief?

Animation Tax Relief (ATR), is a creative industry tax relief incentive, funded by the UK government.

ATR supports UK animation production companies by offering them a tax rebate against the money they spend on the pre-production, principal photography and post-production of a new animation project.

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How much Animation Tax Relief can I claim

How much Animation Tax Relief can I claim?

Animation Tax Relief is worth up to 20% of the core production costs of an animation project. The production company can claim ATR on whichever is the lower:

  • 80% of the total core expenditure
  • The total core expenditure incurred in the UK.

If the production is profitable, the Animation Tax Relief can be used to reduce a Corporation Tax bill. If the animation makes a loss, claimants can receive a cash payment from HMRC at 20% of production costs.

How to qualify for Animation Tax Relief

To qualify for Animation Tax Relief, you need to meet the following criteria:

  • Your company must be actively responsible for the planning, production, and decision-making for the animation's pre-production, principal photography and post-production stages.
  • The animation programme must be intended for broadcast, including streaming online. It may be mixed content. However, at least 51% of the core expenditure must relate to animation production.
  • The animation programme should qualify as “British” under the British Film Institute (BFI) Cultural Test or qualify as an official co-production.
  • At least 10% of your total production costs are related to activities within the UK.
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What animation will not qualify

What animation will not qualify?

An animation will not qualify for ATR if;

  • It is an advertisement or promotional programme.
  • It is a news, current affairs or discussion programme.
  • It is a quiz or game show, panel show, variety show or similar programme.
  • Consists of or includes an element of competition or contest.
  • It is produced for training purposes.

What is the Animation Tax Relief claims process?

Animation Tax Relief is claimed as part of the Company Tax Return (CT600) filed with HMRC. To make an ATR claim, you’ll need to be registered as a company and have the following documents:

  • Your BFI cultural certificate to prove your game qualifies as “British”.
  • Statements showing your core expenditure broken down by category and UK and non-UK spending.
  • A profit and loss account for each animation programme produced (each must be reported to HMRC as a separate trade).
  • You’ll need to calculate if your animation programme has made a profit or a loss and determine whether your ATR claim should be surrendered as a loss for a cash repayment or used to reduce your tax bill.

HMRC has a specific approach for calculating an Animation Production Company's (APC) taxable profit and loss. There are restrictions on how losses can be used, which will vary depending on whether the programme is finished and trade has ceased.

Whats the process to claim R&D Tax Credits

How can we help?

Myriad is a leading innovation funding consultancy that employs Animation Tax Relief application specialists, qualified cost accountants and corporate tax experts.

Our specialist team has proven successful in delivering maximum claims for UK Animation companies.

About Myriad
Animation Tax Relief Video
  • Confident in delivering value to our clients, we offer our ATR services on a success fee-only basis.
  • We handle your ATR claim from start to finish and aim to take up as little of your time as possible.
  • Our expert consultants can identify your qualifying projects and eligible expenses, including costs often missed by accountants and in-house teams.

Frequently asked questions

If you want to claim Animation Tax Relief, your animation programme must be certified as British. You must pass the British Film Institute (BFI) cultural test to receive this certification.

To pass the BFI cultural test, complete an online application form for each animation programme for which you want to claim ATR. If the animation programme is intended as a series, you can make one application to cover all episodes within the series. The BFI will assess your application and award points based on the cultural content of the animation programme, its cultural contribution, its cultural hubs, and its cultural practitioners. To pass the test, each amination programme must score at least 16 out of 31 points.

Myriad Associates employs BFI application specialists who can help you pass this test. Contact us for advice

The cultural test for animation programmes is set out in The Cultural Test (Video Games) Regulation 2014, but for more information, read this.

In addition to completing an application form for each animation programme, a Statutory Declaration to certify the truth of the particulars in the application is also required.

The Statutory Declaration can be made before a practising solicitor, a general notary, a Justice of the Peace, or any other officer authorised by law to administer a statutory declaration under the Statutory Declaration Act 1835.

An Accountant’s report is required if an application for a final certificate relies upon points in Section C and/or Section D of the cultural test. The Accountant’s Report must be prepared by a person eligible for appointment as a company auditor under Section 1212 of the Companies Act 2006.

The Accountant's Report is required when an application claims points in Section C and/or Section D.

The Accountant's report aims to verify the total and UK expenditure of the work in Section C and the nationality or residence of all persons in Section D.

The Accountant's Report must be prepared by a person eligible for appointment as a company auditor under section 1212 of the Companies Act 2006.

An Accountant’s Report can cost between £500 and £2,000 per application, depending on the video game costs and the number of applications you submit.

The BFI cultural test regulations require you to make a statutory declaration which states that the information you’ve given in your application is accurate.

A statutory declaration is required for both the Interim and Final certifications.

The statutory declaration must be made before a practising solicitor, general notary, Justice of the Peace or an officer authorised by law to administer a statutory declaration under the Statutory Declaration Act 1835.

You can apply for both Animation Tax Relief and R&D Tax Credits. However, you may only claim a given project cost against one of these schemes, not both.

In some instances, you can maximise your overall tax relief by applying to both schemes and claiming specific costs against each scheme on a project-by-project basis.

Myriad Associates can help you with this. To maximise your tax relief, we’ll study your projects, assess your costs and establish which project costs to claim under which scheme.

Contact us for advice.

Non-core animation programme expenditure relates to initial design stage activities or commercial exploitation of the video game.

For example, initial concept artwork used to establish commercial viability is not a core expenditure and is not eligible for ATR. Marketing an animation programme is also considered a non-core expenditure.

Additonal ineligible expenditures include entertaining, publicity, promotion, audit fees, interest, completion bonds and other forms of insurance.

The amount of Animation Tax Relief (ATR) to which an Animation Production Company (APC) is entitled in respect of an animation programme trade is determined by the amount of core expenditure related to activity undertaken in the UK.

Where an animation programme is partly produced in the UK and partly outside of the UK, it will follow that some goods and services may be non-UK. In such cases, it will be necessary to apportion the relevant core expenditure between UK and non-UK expenditure.

This applies in the case of goods and services provided throughout core expenditure stages. It applies to expenditures incurred during pre-production, principal photography and post-production.

The apportionment method is not fixed and can be determined on a case-by-case basis. The key criterion is that it must be done fairly and reasonably.

There will often be more than one ‘fair and reasonable’ basis. The requirement is not that the apportionment must be made using the fairest and most reasonable basis but simply that it must be made fairly and reasonably.

You can claim animation tax relief on your animation program if;

  • It has been certified as British by the British Film Institute (BFI). This is achieved via a cultural test completed online.
  • The animation programme is intended for broadcast, which includes streaming online.
  • 51% or more of the core expenditure is on the animation.
  • At least 10% of the core costs relate to activities in the UK.

As the legislation doesn’t define the term “animation”, the ordinary meaning applies.  Therefore, an animation may include various techniques, which include but are not limited to:

  • Hand-drawn illustrations.
  • Stop-motion or computer-generated images rendered in 2D or 3D.
  • Using photography to generate individual frames, as in stop motion.

Your animation will also need to qualify as a television programme, which is defined as “any programme (with or without sounds)" which:

  • is produced to be seen on television (including the internet) and
  • consists of moving or still images, legible text, or a combination of those things.

There is a list of excluded programmes.  If your animation programme falls into one of these categories, it will not qualify for the animation tax relief.

  • Advertisements or other promotional material.
  • News or current affairs programmes or discussion programmes.
  • Any quiz show, game show, panel show, variety show, chat show or similar entertainment.
  • A programme that consists of or includes a competition or contest or announces the results of a competition or contest.
  • Any broadcast of live events or theatrical or artistic performance given otherwise than for the purpose of being filmed.
  • Any programme produced for training purposes.

Does your business qualify?

Speak to our team today to see if your activities qualify.


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Is your business registered for Corporation Tax in the UK or are you a partnership with corporate owners?


Have you developed new or improved existing products, processes or services in the last 2 accounting periods?

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Have you incurred any R&D costs on staff, contractors and consumables?

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Does your business have fewer than 500 staff, and either: A turnover of no more than €100 million; or Gross assets of no more than €86 million?

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Sorry, you must be a UK limited company or be a Partnership with corporate owners to be eligible for R&D tax credits.

In order to qualify for R&D tax credits you must be seeking to advance science or technology within your industry. As you’ve not developed any new or improved any existing innovative tools, products or services, and not re-developed any existing products, processes or services in the last 2 years. It is unlikely you have any qualifying activity. If you’re unsure, email or call us and we’ll help clarify.

In order to claim R&D tax credits, you need to either employ staff or spend money on contractors, consumable items and other items. If you’re unsure, email or call us and we’ll help clarify.

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Congrats!! Based on your previous answers, you will qualify for the SME scheme. If you’d like some help maximising and securing your claim, please email or call us.

Congrats!! Based on your previous answers, you will qualify for the RDEC scheme. If you’d like some help maximising and securing your claim, please email or call us.

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