Panel: Finance, Tax and Funding
Rosemary Klein The Television Affairs Consultancy
This panel delivered a complete run down of the latest news on tax breaks, new funding initiatives and project finance approaches.
Some essentials for getting an animation tax break…
- You have to be an Animation production company officially registered with Companies House before pre-production starts. That’s essential – you won’t be eligible if you set up midway through production.
- It must be intended for broadcast. This can be the TV or the internet.
- 51% of the core budget must be on animation expenditure to qualify for animation tax relief.
- If you are under 51% animation you could look at the Children’s TV tax credit. The relief is the same.
- You need to prove that your production is British. There is a cultural test that Anna and her team co-ordinate. Nis has a potential 31-points to be gained, but you only need 16 points to pass.
- You can also qualify as British if you are an official co-production using a treaty partner – currently Australia, Canada, Israel and the occupied Palestinian territories.
Harvey offered his comprehensive list of regional funds to apply for across the country. You will need a robust business plan in place and you will need to clearly identify which markets you are aiming for with your project and describe the background for your team. Your project will also need to create jobs and a legacy for the region.
A company like Compact Media Group can help you to unlock hidden royalties further down the line. Within music publishing you can gain royalties from the music in your show. Define these before you start – they can form an important and significant revenue stream.
Audio visual royalties can also be significant. There are now 34 societies around the world that collect money from rights holders. Animation royalties can add up for smaller producers – do get specialist help as the rights can be hidden deeply within agreements.
There are a number of routes to finance.
- Private equity: issue shares in your production and agree voting rights and profit shares with your investors.
- The UK tax system has arrangements in place that make investment attractive for wealthy individuals.
- The Seed Enterprise Investment Scheme (SEIS) can raise up to £150K for your production. Any single investor can put in up to £100K. The investor gets 50% back from income tax immediately. This is mostly used for the development phase of projects.
- Enterprise Investment Scheme (EIS). You can raise up to £5million. Investors get an income tax rebate of 30%. This shceme is generally used for production finance.
- Crowdfunding is also a really interesting model. It takes different forms – platforms such as Kickstarter, you don’t give away equity in the project, people pay money to be part of the project. ‘Morph’ and ‘Rastamouse’ were successful in this way. It is a lot of work and takes vociferous viral marketing, but it can work well. It works best with animation projects with a cult following in the past. The other form involves the crowd-funders putting up investment sums on the hope of a return.
- Seedrs is an online equity funding platform which can also be an excellent way of raising finance.
The Television Affairs Consultancy
Director of Television Affairs
Compact Media Group
Vice President Sales & Development
Compact Media Group
SVP Film and media collection
Head of Certification
Harbottle & Lewis
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