Tag: Treasury

The press release issued by HM Treasury on 15 February 2024.

The Economic Secretary to the Treasury Bim Afolami has appointed Bryan Zhang to the board of the Financial Conduct Authority (FCA).

Mr Zhang has extensive experience within financial services, particularly within Fintech, Digital Transformation, and Open Banking. He is a Co-Founder and the Executive Director of the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School; he will take up a role as Non-Executive Director on Monday 19 February 2024 serving an initial three-year term.

The Economic Secretary to the Treasury, Bim Afolami, said:

“Ensuring that regulation keeps pace with technological developments is crucial to supporting innovation and competition in the financial services sector, whilst also ensuring that consumers are appropriately protected.

“I am therefore delighted with the appointment of Bryan Zhang to the Board of the FCA. Bryan has demonstrated expertise in technology-driven innovation in financial regulation, which will be of significant benefit to the FCA Board.”

FCA Chair Ashley Alder said:

“Bryan brings with him a wealth of experience working at the forefront of innovation. I know he will be an important asset to the board and his expertise will help the FCA keep pace with an ever-evolving landscape.”

Further Information

• The Financial Conduct Authority is the conduct regulator for around 45,000 financial services firms and financial markets in the UK.
• Under the Financial Services and Markets Act 2000, HM Treasury is responsible for appointing the members of the FCA Board.
• The FCA Board is responsible for setting the organisation’s strategic direction, making key policy decisions, and holding the FCA executive to account.
• Appointments and reappointments to the FCA Board are regulated by the Office of the Commissioner for Public Appointments.
• All appointments are made on merit and political activity plays no part in the selection process. However, in accordance with the Governance Code on Appointments there is a requirement for appointees’ political activity (if any is declared) to be made public. Bryan Zhang has not engaged in any political activity in the past five years.

The press release issued by HM Treasury on 5 February 2024.

A fraudster from North London has been sentenced after using a government-backed Bounce Back Loan for his own personal use.

The press release issued by HM Treasury on 1 February 2024.

More than 38,000 pubs are set to benefit from six-month freeze to alcohol duty from today.

• The great British pub receives further boost from today as a six-month alcohol duty freeze to 1 August 2024 takes effect.
• This tax saving will help support around 38,175 pubs to face rising costs.
• Duty freeze comes in addition to £4.3 billion in business rates cuts and duty protection for pints sold in pubs.

Pubs and hospitality venues have received a tax saving today, 1 February 2024, as a six-month alcohol duty freeze takes effect.

British pubs are a significant part of the fabric of communities across the UK and a further freeze on alcohol duty will help to support the sector while the government continues to bring down inflation while driving growth and investment.

This will impact around 38,175 pubs across the country and was announced as part of a multi-billion support package by Chancellor Jeremy Hunt in his Autumn Statement which also included £4.3 billion business rates relief.

Exchequer Secretary to the Treasury, Gareth Davies, said:

The great British pub remains a critical part of communities across the country, that’s why we’re helping to keep costs low by freezing alcohol duty, reducing business rates, and supporting on energy costs.

Our decisive action has also helped to more than halve inflation last year, protecting pubs and other businesses from the higher costs they would have otherwise faced.

And we need to stick to our plan, so we can deliver the long-term change our country needs to deliver a brighter future for Britain, and improve economic security and opportunity for everyone.

The six-month duty freeze, from 1 February to 1 August 2024, follows the biggest reform of alcohol duties taking effect last August, where, for the first time in over 140 years the UK’s alcohol duty system simplified so the duty paid reflects the amount of alcohol in it.

These reforms cut duty on pints in pubs by up to 11p when sold in supermarkets. Not increasing alcohol duty in line with inflation has now saved a further 3p to the duty on a typical pint of beer, 2p to a pint of cider, 4p to a glass of whisky, or 18p to a bottle of wine.

Welcoming the decision by the Chancellor to freeze alcohol duty, Nuno Teles, Managing Director, Diageo Great Britain, said:

By freezing duty until August, HM Treasury has listened to the industry’s plea for support and decided to back our homegrown sector, that employs so many people across the UK, and we urge the Chancellor to continue to back pub-goers, hospitality owners and producers.

Andy Slee, Chief Executive of the Society of Independent Brewers (SIBA) said:

While trading has been tough for pubs and independent breweries, the government’s continued support is very welcome. The beer duty freeze for six months provides some certainty for brewers as the new alcohol duty system is embedded.

As part of this, the government introduced Draught Relief allowing beer destined for the pub to have a lower rate – and already there are signs that this is working to support pubs.

The duty freeze formed part of a multi-billion pound support package for the alcohol duty industry announced at the Autumn Statement.

Retail, Hospitality and Leisure business rates relief was extended for a fifth year to 2024-25. This means around 230,000 retail, hospitality and leisure properties will receive 75% relief, up to a cap of £110,000 per business, on their business rates bills from the 2024-25 tax year. This is a tax cut worth nearly £2.4 billion and comes on top of one third of business properties being taken out of paying business rates completely thanks to other government reliefs.

The small business multiplier for business rates was also frozen for a fourth consecutive year, protecting over a million ratepayers from an inflation increase in their bills.

August 2023’s historical alcohol duty reforms saved on taxes in three ways. Firstly, on draught drinks in the pub for all draught products below 8.5% alcohol by volume (ABV) through increasing Draught Relief. This is part of this government’s Brexit Pubs Guarantee commitment for every pint in every pub to pay less duty than their supermarket equivalent. Secondly, tax was cut on lots of popular drinks in shops like sparkling wines and ready-made drinks. Finally, the new Small Producer Relief was announced to help small businesses and start-ups create new drinks, innovate and grow.

The press release issued by HM Treasury on 31 January 2024.

Millions of UK workers see boost in take home pay today as cut to National Insurance shows in January’s payslip as part of plan to reward work and boost growth.

• Progress made on economy means government is able to cut taxes for hard working people
• Saving worth £450 for an average worker earning £35,400 a year

Millions of workers are going to start seeing a boost to their take home pay today as January’s pay comes into bank accounts across the UK.

With millions of monthly earners getting paid today (Wednesday 31 January 2024), a household with two average earners will be starting to see a nearly £1,000 a year benefit from the Chancellor’s record personal tax cut.

Thanks to the progress made against its economic priorities, the government announced it will cut National Insurance by 2p from 12% to 10% at the Autumn Statement and made sure it took effect within weeks of the announcement, as part of its plan to reward work and grow the economy. The change is a more than 15% reduction in National Insurance, saving £450 this year for the average salaried worker on £35,400.

Millions of people working different jobs across hundreds of industries will now be better off. To a pub landlord that’s £418 a year, a bus driver £328, a nurse £527. A teacher will pay £635 less in National Insurance contributions this year.

Today’s historic NICs cut takes effect with the government having faced the legacy of Covid-19, and global instability with war in Ukraine and the Middle East.

In the past year, inflation has halved; the economy has recovered more quickly from the pandemic than first thought; and debt is on track to fall. The government is sticking to the plan and is building a stronger economy where hard work is rewarded and ambition and aspiration are celebrated.

Chancellor of the Exchequer Jeremy Hunt said:

“I never shied away from making the tough decisions needed yesterday to cut taxes today.

“This January pay boost for hard-working Brits is part of our plan to grow the economy and build a brighter future where hard work is always rewarded, relieving pressure on UK workers by putting around £450 back in their pockets.”

The cut means that for those on average salaries, personal taxes would be lower in the UK for single parents with no children than every other G7 country, based on the most recent OECD data. The UK also has the most generous starting allowances for income tax and social security contributions in the G7.

To mark the tax cut, earlier this month HMRC launched an online tool to help people understand how much they could save in National Insurance this year.

The tool uses salary information to give employees personalised estimates of how much they could save because of the government’s changes, and is hosted on the government’s cost of living support website on gov.uk.

The last major cut to the current personal tax system of today’s magnitude was when the National Insurance personal allowance increased from £9,880 to £12,570. This was the largest ever cut to a personal tax starting threshold, allowing working people to hold on to an extra £2,690 free from tax whilst last year taking around 2.2 million people out of paying tax altogether.

The cut to National Insurance combined with above-inflation increases to tax thresholds since 2010 means that the average earner will pay over £1,000 less in personal taxes than they otherwise would have done.

The independent Office for Budget Responsibility (OBR) says that, by 2028-29 this tax cut will increase the number of people in employment by 28,000 alongside a substantial economic benefit from those in work increasing their hours which the OBR forecast will be equivalent to 79,000 on a full-time equivalent basis. Overall, the OBR says that by 2028-29 this measure will increase the number of hours worked by new and existing employees by 0.3%, or 94,000 in full-time equivalent terms.

At the Autumn Statement the Chancellor Jeremy Hunt announced the biggest package of tax cuts to be implemented since the 1980s. In addition to today’s action, he announced a National Insurance cut for 2 million self-employed people, which will take effect on 6 April 2024 and is worth £350 for the average self-employed person on £28,200. He also made full expensing permanent, which at £11 billion per year is the biggest business tax cut in modern British history helping businesses invest for less. Over 200 business leaders told the government that it would have the single most transformational impact on business investment and growth.

The OBR says these two measures will increase the number of people in work and grow the economy.

He also announced the biggest ever increase to the National Living Wage, froze alcohol duty for six months and extended cuts to business rates relief for the high street.

Further information

Today’s tax cut combined with above-inflation increases to tax thresholds since 2010 means that the average earner will pay over £1,000 less in personal taxes than they otherwise would have done – this is based on the mean earnings for all employees from ASHE 2023. The income tax and employee NICs liability is compared to a hypothetical counterfactual where tax rates are kept unchanged and thresholds are uprated in line with inflation every year.

• Use HMRC’s new online tool to estimate yearly national insurance savings thanks to the 2p cut
• Visit the government’s cost of living support website
• National Insurance factsheet
• Latest OECD tax on wages data

The press release issued by HM Treasury on 25 January 2024.

The Bank of England (the Bank) and HM Treasury have today published their response to the consultation on a digital pound that was launched in February 2023.

• Bank of England and HM Treasury update on proposals for a digital pound which would include primary legislation to guarantee users’ privacy and control.
• Response confirms that neither the Bank nor the government would have access to users’ personal data.
• Authorities committed to maintaining access to cash for those who prefer it.
• Continuing work on digital currency will strengthen the UK’s position as a competitive global leader in finance.

The Bank of England (the Bank) and HM Treasury have today (25 January) published their response to the consultation on a digital pound that was launched in February 2023.

No final decision has been made to pursue a digital pound – also called a central bank digital currency (CBDC).

Work will continue during the design phase exploring its feasibility and potential design choices. This will look at how a digital pound could be used in the UK economy, providing greater choice, convenience and innovation for households and businesses making and accepting everyday payments. As part of broader work on payments innovation, the work will also help strengthen the UK’s position as a competitive global leader in finance.

The feedback from respondents from a range of industries and organisations was largely supportive of the proposed design set out in the 2023 Consultation Paper, while other respondents raised concerns about the implications of a digital pound for access to cash, users’ privacy, and control of their money.

To address these concerns, today’s publication confirms that, if a digital pound were to be implemented, primary legislation would be introduced, and this would guarantee users’ privacy and control. The Bank and the government would not have access to any personal data and users would have freedom in how they spent their digital pounds. There would also be a further public consultation on a digital pound prior to the introduction of primary legislation. These commitments would give both Parliament and the public further opportunities to have their say.

In addition, today’s publication reiterates the commitment of both the government and the Bank to protect access to cash, even if a digital pound were introduced.

Economic Secretary to the Treasury, Bim Afolami, said:

“We are at an exciting time of innovation in money and payments, and we want to ensure the UK is ready should a decision to build a digital pound be taken in the future. This is the latest stage in our national conversation on the future of our money – and it is far from the last.

“We will always ensure people’s privacy is paramount in any design, and any rollout would be alongside, not instead of, traditional cash.“

Deputy Governor for Financial Stability, Sarah Breeden, said:

“Trust in all forms of money is an absolute necessity. We know the decision on whether or not to introduce a digital pound in the UK will be a major one for the future of money. It is essential that we build that trust and have the support of the public and businesses who would be using it if introduced.”

Following the design phase, the Bank and the government will decide whether or not to build a digital pound, and, if proceeding, would set out a timetable for further consultation on legislation and a potential launch.

What would a digital pound look like?

• A digital pound would complement the role of cash in a digital world and give people more choice in how they make everyday payments.
• £10 of a digital pound would always be worth the same as £10 in banknotes or coins.
• It would be issued by the Bank of England, widely available and convenient to use.
• It would be easily exchangeable with other forms of money, including cash and bank deposits.
• It would be accessed through digital wallets offered to the public and businesses by the private sector through smartphones or smartcards.
• It would be intended for payments made online, in-store, and between individuals, rather than for savings, and it would not pay interest.
• There would be restrictions, at least initially, on how much an individual or business could hold.
• Like banknotes, it would be a claim on the Bank of England, have intrinsic value and be stable, unlike unbacked cryptoassets.

The press release issued by HM Treasury on 18 January 2024.

Jeremy Hunt champions British science and tech in first visit to the World Economic Forum’s Annual Meeting in Davos, Switzerland from a UK Chancellor since 2019

The press release issued by HM Treasury on 11 January 2024.

The three external members have been reappointed by the Economic Secretary to the Treasury.

John Taylor, Antony Jenkins, and Tanya Castell have been reappointed by the government as external members of the Prudential Regulation Committee (PRC).

John Taylor will serve a further three-year term, from 14 January 2024 to 13 January 2027. Antony Jenkins will also serve a further three-year term, from 5 April 2024 to 4 April 2027. Tanya Castell will serve a further three-year term from 1 September 2024 to 31 August 2027.

The Economic Secretary to the Treasury, Bim Afolami, said:

“I am pleased to reappoint John Taylor, Antony Jenkins, and Tanya Castell to the Prudential Regulation Committee. They have all made important contributions during their initial terms on the Committee and their reappointments will ensure the PRC continues to benefit from their industry experience and expertise.”

Further information

John Taylor currently serves as a non-executive director on the boards of the International Centre for Mathematical Sciences, the Royal Conservatoire of Scotland and the Medical, Dental Defence Union of Scotland and a member of Scottish Taskforce for Green and Sustainable Financial Services. He is a former chair of the Scottish Financial Risk Academy and a former president of the Institute and Faculty of Actuaries.

Antony Jenkins is the founder, chair and CEO of 10x Future Technologies Group, a company that aims to redefine how banks operate and engage with customers. He is chair of Redpin, the first non-bank foreign exchange payments specialists in the UK and member of the Advisory Board of Palamon Capital Partners. Previously, Antony held board leadership positions at Barclays Plc (2009 – 2015) including chief executive officer from 2012-2015.

Tanya Castell is an independent non-executive director on the Board of Border to Coast Pensions Partnership, which is an asset management company set up to pool the assets of the 11 local authority pension funds that own it. Tanya is also a member of the Financial Conduct Authority’s Regulatory Decisions Committee, a trustee on the board of the Royal National Institute for Blind where she chairs the Audit, Risk and Assurance Committee and the founder (and former CEO) of the charity Changing the Chemistry. Its aim is to improve diversity of thought on boards.

About the Prudential Regulation Committee

The Prudential Regulation Authority (PRA) supervises banks, insurers and major investment firms.

The PRA’s most important decisions are taken by the Prudential Regulation Committee, chaired by the Governor of the Bank of England. Five members are Bank staff, including the governor and four deputy governors. The Prudential Regulation Committee has a majority of external members, including the chief executive of the Financial Conduct Authority and six others selected for their experience and expertise in financial services.

The press release issued by HM Treasury on 6 January 2024.

27 million people across the UK will benefit from a yearly tax cut worth hundreds of pounds from today, meaning a household with two average earners will save nearly £1,000 per year.

• 27 million people to get tax cut from today as the main rate of employee National Insurance will be cut by two percentage points, from 12% to 10%.
• Change in gear for government, cutting taxes for hard working people so they have more money in their pocket.
• Online tool launched to help workers estimate their savings.

The main rate of National Insurance has been cut by 2p from 12% to 10% today (Saturday 6 January 2024). This reduces National Insurance by more than 15%, saving £450 this year for the average salaried worker on £35,400.

Millions of people working different jobs across hundreds of industries will now be better off. An average full-time nurse will save £520, a typical junior doctor £750 and an average teacher £630.

In the past year, inflation has halved; the economy has recovered more quickly from the pandemic than first thought; and debt is on track to fall. With a renewed focus on the long-term decisions to strengthen the economy, the government is changing gear and cutting taxes for hard working people, giving them the opportunity to build a wealthier, more secure life for themselves and their families.

Prime Minister Rishi Sunak said:

“We have made tough decisions on the economy, supporting people through global shocks such as the pandemic and Putin’s illegal invasion of Ukraine. It is because of the tough decisions this government has taken that today we are able to cut taxes for 27 million people across the UK.

“Today’s tax cuts will directly reward hard working people, putting £450 back in the pocket of the average worker and helping them make ends meet.”

Chancellor of the Exchequer Jeremy Hunt said:

“With inflation halved, we’ve turned a corner and are cutting taxes – starting with today’s record cut to National Insurance worth nearly £1,000 for a household.

“From nurses and brickies, to cleaners and butchers, 27 million hard-working Brits will have a little more cash in their pockets.”

The cut means that for those on average salaries, personal taxes would be lower in the UK than every other G7 country, based on the most recent OECD data. The UK also has the most generous starting allowances for income tax and social security contributions in the G7.

To mark the tax cut, HMRC have launched an online tool to help people understand how much they could save in National Insurance this year.

The tool will use salary information to give employees personalised estimates of how much they could save because of the government’s changes, and will be hosted on the government’s cost of living support website on GOV.UK.

The last major cut to the current personal tax system of today’s magnitude was when the National Insurance personal allowance increased from £9,880 to £12,570 in July 2022. This was the largest ever cut to a personal tax starting threshold, allowing working people to hold on to an extra £2,690 free from tax whilst taking 2.2 million people out of paying tax altogether.

Today’s tax cut combined with above-inflation increases to tax thresholds since 2010 means that the average earner will pay over £1,000 less in personal taxes than they otherwise would have done.

At the Autumn Statement the Chancellor Jeremy Hunt announced the biggest package of tax cuts to be implemented since the 1980s. In addition to today’s action, the Chancellor also announced a National Insurance cut for 2 million self-employed people, which will take effect on 6 April 2024 and is worth £350 for the average self-employed person on £28,200. He also announced the biggest ever increase to the National Living Wage, effectively cut corporation tax by more than £55 billion as he made full expensing permanent to help businesses invest for less, froze alcohol duty for six months and extended cuts to business rates relief for the high street.

Today’s historic National Insurance cut takes effect following the government stepping in to support households during the Covid-19 pandemic and throughout Putin’s barbaric war in Ukraine. The government took the decision to manage the public finances responsibly by not saddling future generations to help pay down debt.

Further information

• Use HMRC’s new online tool. It will be online at 05:00 on Saturday 6 January 2024.
• Visit the government’s cost of living support website
• National Insurance factsheet
• Latest OECD tax on wages data
• Visit the Treasury’s Flickr to view photos from the Chancellor’s visit to Openreach, Crawley to mark the NICs cut
• Today’s NICs cut has reduced the 32% combined tax rate for employees (income tax + national insurance) paying the basic rate of tax to 30% – the lowest since the 1980s.
• From April 2024, a full time National Living Wage worker’s take home pay will be 30% greater in real terms than it was in 2010, due to successive increases in the National Living Wage and changes to personal tax rates and thresholds.
• The OBR say that, by 2028-29 this tax cut will increase the number of people in employment by 28,000 alongside a substantial economic benefit from those in work increasing their hours which the OBR forecast will be equivalent to 79,000 on a full-time equivalent basis. Overall, the OBR say that by 2028-29 this measure will increase the number of hours worked by new and existing employees by 0.3%, or 94,000 in full-time equivalent terms. This shows the government is making work pay.

Who does this help?

• A senior nurse with 5 years of experience on £42,618 will receive an annual gain of £600.
• An average full-time nurse on £38,900 will receive an annual gain of over £520.
• An average police officer on £44,300 will receive an annual gain of over £630.
• A typical junior doctor on £63,000 will receive an annual gain of over £750.
• A cleaner working night shifts on £21,000 will receive a gain of £170.
• A typical self-employed plumber on £34,400 will receive an annual gain of £410.
• An average teacher on £44,300 will receive an annual gain of over £630
• A hard-working family with 2 earners on the average earnings of £35,404 will be £900 better off.

The press release issued by HM Treasury on 2 January 2024.

Self Assessment customers have less than one month to file their tax returns.

With less than a month to go to the Self Assessment deadline, HM Revenue and Customs (HMRC) is urging nearly 5.7 million customers to file their tax return for the 2022 to 2023 tax year.

HMRC data shows almost 6.5 million customers have already beaten the Self Assessment clock by filing their tax return including 49,317 customers who used the New Year holiday to get a head start on their tax obligations:

• 25,593 customers filed their tax return on New Years Eve, with the most popular time being between 12:00 and 12:59, when 2,677 customers filed
• 127 customers saw in the New Year by filing their tax return between 00:00 and 00:59 on 1 January
• 23,724 customers filed on New Year’s Day, with the most filing between 15:00 and 15:59, when 2,354 customers filed

The deadline to file a tax return for the 2022 to 2023 tax year and pay any tax owed is 31 January 2024. Customers can submit their tax returns and pay any tax owed online at GOV.UK.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

The clock is ticking for those customers yet to file their tax return. Don’t put it off, kick start the new year by sorting your Self Assessment. Go to GOV.UK and search ‘Self Assessment’ to get started start today.

HMRC has a wide range of resources online including a series of video tutorials on YouTube, help and support on GOV.UK, to support customers in completing their tax return.

The quickest and easiest way customers can pay their tax bill is via HMRC’s app which is free and secure. Information about the different ways to pay can be found on GOV.UK.

Customers who are unable to pay in full can access support and advice on GOV.UK. HMRC may be able to help by arranging an affordable payment plan, known as Time to Pay for those who owe less than £30,000. Customers can arrange this themselves online. Go to GOV.UK and search “HMRC payment plan” for more information.

HMRC will consider a customer’s reasons for not being able to meet the deadline. Those who provide HMRC with a reasonable excuse may avoid a penalty. The penalties for late tax returns are:

• an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
• after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
• after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
• after 12 months, another 5% or £300 charge, whichever is greater

There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months. Interest will also be charged on any tax paid late.

Customers need to be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is available on GOV.UK.

The press release issued by HM Treasury on 1 January 2024.

British film, TV and video game producers will benefit from new, more generous tax credits that start today (1 January 2024).

• New and improved tax credit system for film, TV and video game production companies starts from today (1 January 2024)
• An extra £42,500 in relief for children’s TV, animated TV and animated film production
• £5,000 in relief for high-end TV, film or video game production

To maximise the potential of the UK’s cutting-edge production industry and help incubate unique British talent, the government’s Audio-Visual Expenditure Credit and the Video Games Expenditure Credit replace the previous tax reliefs for film, TV and video games.

All companies will receive more tax relief than they did under the previous system, greater flexibility over production decisions and greater clarity about the amount of credit companies can expect to receive.

Nigel Huddleston, Financial Secretary to the Treasury, said:

We are backing the makers of the next Barbie, Happy Valley and Grand Theft Auto with this new, more generous, tax credit system for British production talent.

The UK is a world leader in creativity, and we want to ensure that continues well into the future by making it easier for British film, TV and video games to thrive.

Under the new system, a children’s TV production, animated TV production or film with £1 million of qualifying expenditure will receive an additional £42,500 in relief. A high-end TV production, film production or video game will receive £5,000 in relief. To ensure fairness, the uplift in relief for animation will be extended to include animated films as well as TV programmes.

The credits will be calculated directly from a production or game’s qualifying expenditure, instead of being an adjustment to the company’s taxable profit.

Animation and children’s TV productions will be eligible for a higher credit rate of 39%, a rate increase of 4.25% under the previous reliefs. The 34% credit rate for film, high end TV and video games is roughly equivalent to a rate increase of 0.5% under the previous tax reliefs.

The new system applies to the whole of the UK. The government has listened to feedback from industry that companies will need sufficient time to adapt to the new expenditure credits. For this reason, productions and games in development on 1 April 2025 may continue to use the previous tax reliefs until they end on until 1 April 2027.

The move to reform tax relief for entertainment productions and video games was announced at the Spring Budget in March 2023. The system implemented today was developed hand in glove with the UK entertainment industry, with consultations on both the policy itself and the draft legislation. It is being legislated as part of the Finance Bill 2023-24.

The UK’s creative industry is already worth £126bn and the UK has the largest video game employee base in Europe, at nearly 21,000 by the last estimate.

Today’s new tax credit system is the latest move by UK Government in support for British creative industries. The Chancellor also announced that full-expensing will be made permanent in 2023’s Autumn Statement, helping creative businesses invest for the less by saving them 25p in every £1 they spend on qualifying equipment and machinery.

At Spring Budget 2023, the Chancellor also extended the rates of relief for theatre, orchestra and museums for two additional years to April 2025.

In September last year, coinciding with a visit by the Chancellor Jeremy Hunt to Warner Bros. Studios in Los Angeles, it was announced that the production giant would expand their studio in Leavesden, Hertfordshire, in 2024. The move is expected to create 4,000 new jobs in the UK and contribute more than £200m to the UK economy.

Further information

• Qualifying expenditure will remain broadly unchanged. For the Video Games Expenditure Credit, to align the conditions for video games with film and TV, at least 10% of expenditure has to be ‘used or consumed’ in the UK.
• At Spring Budget 2023, the Chancellor also extended the higher 45% (for non-touring productions) and 50% (for touring productions) rates of relief for theatre, orchestra and museums for two additional years to April 2025.