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HMRC internal manual

Animation Production Company Manual

Overview and general definitions: meaning of television production activities, production expenditure and core expenditure

S1216AF, S1216AG Corporation Tax Act 2009

Television production activities

For the purposes of the tax regime for Television Tax Relief (TTR) for an animation trade television production activities refers to the activities in respect of which production expenditure is incurred.

For an example of a generic animation pipeline, see APC10135.

Production expenditure

Production expenditure is expenditure on the television production activities consisting of:

  • development,
  • pre-production,
  • principal photography, and
  • post-production.

These activities relate solely to the production of the animation and do not include expenditure on marketing, distribution or other non-production activities.

Core expenditure

TTR is only available on core expenditure.

Development activities are not core-expenditure. Core expenditure consists of:

  • pre-production,
  • principal photography, and
  • post-production.

Stages of animation production

The key distinction to be made between qualifying core-expenditure and all production expenditure is development.


Development is the stage of creation of an animation in which the project progresses from the initial concept to the point at which a decision can be taken whether or not it should proceed.

When looking at the development stage for animation, there may be parallel elements of pre-production. Animation requires more visual and aesthetic creative work at an early stage to proceed. See APC50030 for further discussion of the distinction between development and later stages of production.


Pre-production is the stage of production where activity begins to be directed at actually making the animation. This may include the following activities:

  • securing the necessary permissions for book rights, music and soundtrack
  • booking studio facilities
  • acquiring equipment
  • developing artwork
  • developing characters
  • developing the script and making storyboards
  • rehearsals
  • rough rendering
  • engaging cast and crew

Typically, pre-production will see the script finalised and a storyboard or animatic produced.

Principal photography

Principal photography for an animation is the stage at which filming or final rendering occurs. This stage will often require that certain key elements from pre-production are complete. However, other stages of pre-production might continue.

It is also the stage at which key elements of the soundtrack are created. This includes the main vocal tracks from actors’ performances. This element of principal photography will occur in advance of other stages of animation.


Post-production is the stage where soundtracks are enhanced or added and the animation is edited for broadcast. It is common for some of these stages to occur during or even before principal photography. For example, the voice soundtrack is usually required to be reasonably finalised before animation starts.

At the end of post-production, the animation is in a state where it can be broadcast.