Creative Industries Tax Reliefs post-Brexit

One of CTG’s charity members recently flagged a concern about HMRC guidance for the Creative Industries Tax Reliefs, which states that at least 25% of goods or services – of a theatre production, orchestra concert, or (museum and galleries) exhibition – must be provided from within the European Economic Area (EEA) in order to qualify for the related relief.

The member queried whether HMRC had considered the consequence of the UK’s likely departure from the EEA from 1 January 2021, at the end of the Brexit transitional period, and whether that would render the reliefs impossible to claim as UK expenditure would no longer count toward the relief.

CTG approached contacts at HMRC for clarification, where HMRC said that they were aware that the EEA criteria potentially excluded UK expenditure and, as a result, the relevant legislation was amended last year to ensure that such references would continue to be effective. Specifically, amendments to Part 2 of the Corporation Tax Act 2009 replaced references to “EEA expenditure” with “European expenditure”, which includes the UK.

Additionally, HMRC stated that the relevant guidance/manuals would be updated in due course.