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HMRC internal manual

VAT Fraud

What to consider prior to determining whether to use an intervention: matters to consider when looking at particular types of taxable person or activity: creative industries tax reliefs: introduction

UK production companies involved in film, high-end television and animation (the ‘creative industries’) can apply for a tax relief. They can claim up to:

  • 25% of UK qualifying expenditure (net of VAT) where, with regard to film, the company has a total core expenditure of £20m or less; or
  • 20% of UK qualifying expenditure (net of VAT) where, with regard to film, the company has a total core expenditure of more than £20m.

(Please note that a tax relief for video games is currently being studied by the European Commission and until approval is given no claims can be accepted.)

As well as the possibility of incorrectly or fraudulently claiming the tax reliefs you should be aware that there are also VAT risks, such as using an invalid invoice to evidence a claim to input tax, the incorrect application of the place of supply rules and, in some cases, attempts to fraudulently claim VAT.

This section of the guidance looks at:

  • the parties involved in the application and payment of the reliefs and how the reliefs are claimed (VATF36420),
  • the types of risks that might be encountered with regard to VAT (VATF36433),
  • the types of fraud that might be attempted (VATF36434), and
  • what interventions can be used (VATF36440).

Further guidance on the tax reliefs can be found in VATF36452.