The UK Government has published The Cultural Test (Television Programmes) Regulations 2013 (the “Regulations“) which will come into force on 13 August 2013.
Enacted as part of the Finance Act 2013, new tax reliefs for high-end television and animation were introduced into the Corporation Tax Act 2009, creating a maximum tax credit available to the UK production company of 25% of UK core expenditure. In order to qualify for the tax credit, the programme or animation (the “Project“) must either pass a British cultural test or qualify as an official co-production. The Regulations set out the conditions that must be satisfied for a Project to qualify as “British” for the purposes of the new tax reliefs.
The Regulations divide the cultural test into four sections and points are awarded for:
cultural content (the extent the subject matter is British, relates to another EEA state or, in the case of an animation project, an undetermined location);
cultural hubs (the extent UK facilities and locations are utilised in the production process);
cultural practitioners (the extent to which key creative personnel are either EEA nationals or ordinarily resident in the EEA); and
cultural contribution (the extent to which the Project goes over and above the other cultural content sections).
Subject to certain restrictions as to how points must be distributed between the various heads of the test (preventing a Project passing the test solely on the grounds of language, the location of the work and personnel), a Project will pass the cultural test if it is awarded at least 16 out of a possible 31 points.
The final form of the Regulations largely mirrors the draft version which was published in April of this year as part of the consultation process (for further details see here).
The full text of the Regulations can be found here: http://legislation.data.gov.uk/uksi/2013/1831/made/data.pdf