U.K. to Launch Tax Incentives for Live-Action Kids TV Shows

George Osborne H 2014
AP Images/Invision

Finance minister George Osborne says Britain's creative industries have experienced a "golden age" and makes a 'Wallace & Gromit' joke about the opposition leader

The British government said Thursday that it plans to extend production tax incentives to live-action children's TV.

George Osborne, Britain's chancellor of the exchequer, the U.K. equivalent of other countries' treasury secretary or finance minister, gave his fall budget statement in front of the parliament's House of Commons on Thursday, describing kids TV as "one area of television production that has been in decline."

He said the "new children's television credit" would sit "alongside our new animation credit," which was previously implemented. He didn't immediately detail further specifics.

The speech, a precursor to the annual budget speech in March, draws much TV and other news coverage.

"The government will introduce a new tax relief for children’s television programs from April 2015," the full fall statement document published online after the speech said.

The news made official recent signals from the government to extend incentives to live-action kids TV. "I am looking very seriously to see if I can look to expand tax credits to children's television and also look at it for orchestras," Osborne said at the recent launch of a new arts and creative industries campaign group in London.

Read more U.K. Government TV Tax Credit Gets Positive Response From Entertainment Industry

Earlier this year, Anne Wood, the creator of the Teletubbies, which became one of the U.K.'s most successful children's TV shows after it launched in 1997, said the kids TV industry had been "struggling for many, many years."

Osborne on Wednesday also touted the success of Britain's tax incentives. "Our tax breaks...have ushered in a golden age" for the creative industries in Britain, he said.

The full fall statement also said that the government is looking to reduce the minimum spending percentage requirement for TV productions in the U.K. to bring the limit in line with film tax credit rules. The government will "explore with industry whether to reduce the minimum U.K. expenditure for high-end television tax relief from 25 percent to 10 percent and modernize the cultural test to bring the relief in line with film tax relief," the document said.

Current tax credits for bigger-budget scripted TV shows amount to 25 percent of the budget for "high-end" programs of more than 30 minutes in length with budgets exceeding £1 million per hour. Animation projects intended for broadcast, including online, can also apply for a 25 percent credit without restrictions on budget size or show length.

The March budget saw Osborne give tax breaks to theaters, bolster tax credits available for bigger-budget movies and extend incentives to the VFX business.

Osborne on Wednesday also said the government would look to extend the tax credits for theaters to orchestras as of 2016.

Read more U.K. Government Pumps $9.7 Million into Creative Industries Training Fund

Industry organizations welcomed the promised kids TV tax break. "This is a welcome move from the government, extending the tax benefits that have been rolled out for U.K. film, TV and touring theater into orchestras and children's television," said John Kampfner, director of the Creative Industries Federation.

And Beryl Richards, vice chair of Directors UK, said: "This announcement is great news for children’s television programming. Following the success of the introduction of TV tax credits for high-end drama and animation we are delighted that government has listened to calls from the industry to offer similar support to the U.K. children’s production industry. The U.K. is world renowned for its innovative children’s programming and it is great that the government is recognizing the cultural and economic importance of children’s TV in the production landscape."

Amanda Nevill, CEO of the BFI, said: “We welcome the new tax relief to support children’s television in the U.K. that will provide a valuable boost to the sector. The BFI administers the cultural test for the creative sector tax reliefs already for film, high end television, video games and animation programs, and we look forward to working with government and partners across the industry in developing the new relief for children’s television."

She added: "We will be active in exploring a potential reduction in minimum U.K. expenditure for high-end television tax relief and modernization of the cultural test. Today’s autumn statement is a clear sign of the government’s ongoing commitment to the UK’s thriving creative screen industries, which make such a vital cultural and economic contribution to Britain."

Osborne on Wednesday also once again said the U.K. would continue to crack down on tax avoidance schemes. Such initiatives have also targeted some film investment vehicles and other vehicles used by celebrities.

In his speech, Osborne warned that "the warning lights are flashing" over the world economy, but announced increased growth forecasts for the U.K. economy of 2.4 percent next year, up from 2.3 percent, and 3 percent this year, up from 2.7 percent. He said that makes Britain's economy grow faster than other mature economies. And he said that the government expects a budget surplus by 2019/2020, which would be the first surplus in a generation.

Also in his Wednesday speech, Osborne made an entertainment industry-related joke that opposition Labour Party leader Ed Miliband could become the new voice of Wallace in Wallace & Gromit if he fails to win next year's elections. Wallace & Gromit creator Nick Park has said he wasn't sure if there would be more adventures of the duo since voice actor Peter Sallis has been in poor health.

"Our whole house has been saddened to hear that Wallace & Gromit may no longer be produced because the man behind Wallace's voice has retired," Osborne told the House of Commons. "I'm sure the whole house will unite behind a suitable and by then available candidate."

Dec. 3, 7:40 a.m. Updated with latest information.

Alex Ritman in London contributed to this report.

Email: Georg.Szalai@THR.com
Twitter: @georgszalai