Inquiry Conducted by the Culture, Media and Sport Committee on the British Film and Premium Television Industry
The UK's Screen sector, a significant contributor to the country's economy and a magnet for foreign direct investment, is facing several challenges, particularly in the aftermath of the pandemic. One of the key issues is the under-support from the UK's R&D Tax Relief scheme, which excludes research and development in the arts, humanities, and social sciences.
According to the Creative Industries Policy and Evidence Centre (Creative PEC), there is a need to amend the definition of R&D for tax relief purposes to include these disciplines. The Creative PEC has proposed several policy options to strengthen the UK's R&D Tax Relief offer to support the Screen sector.
One of the key solutions is the implementation of agile innovation funding. This would involve reforming R&D tax relief to be more flexible and better targeted at the evolving needs and timelines of creative projects, enhancing its effectiveness.
The importance of R&D in driving innovation within creative sectors, including film, TV, and games, is also recognised. Tax relief schemes should be adapted to better recognise and support the unique R&D activities in these fields.
Investment in creative industries R&D should be transformed to align with industry-specific innovation requirements and economic impact. This implies policy reforms that tailor R&D tax relief packages to the creative (including Screen) sectors' characteristics.
The Creative PEC has conducted extensive research on creative industry clusters, suggesting that geographically sensitive policies including tax incentives could be part of supporting regional growth and screen sector innovation hubs.
The main policy options suggested by Creative PEC to strengthen the UK's R&D Tax Relief offer to support the Screen sector include:
- Enhancing flexibility and responsiveness of R&D tax relief funding to sector innovation cycles.
- Tailoring relief criteria and support to the specific R&D activities and innovation processes in film, TV, and games.
- Integrating tax relief policy with broader innovation funding strategies to support regional creative clusters.
- Increasing overall investment recognition and support for creative R&D as a key component of the UK's economic growth strategy.
In addition to these policy recommendations, several steps are highlighted to improve the quality of work in the sector. The Department of Culture, Media and Sport's (DCMS) Culture and Heritage Capital Framework is recommended for continued support to assess where investment is needed.
Resources and guidance materials for the sector on how to use valuation methods in business cases and appraisals are also recommended. Addressing the significant skills shortages within the UK's screen sector, affecting a wide range of roles, will also be crucial in ensuring the sector's continued growth and success.
[1] Creative PEC. (n.d.). Strengthening the UK's R&D Tax Relief offer to support the Screen sector. Retrieved from https://www.creativepec.ac.uk/
[2] Creative PEC. (n.d.). Creative Industry Clusters. Retrieved from https://www.creativepec.ac.uk/
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