What’s in the 2024 Autumn Budget for the creative industries?
Chancellor Rachel Reeves delivered the 2024 Autumn Budget 30 October, the first from the UK’s new Labour government. Here’s a round-up of measures and announcements relevant to businesses in the creative industries.
Describing it as a Budget “to fix the foundations”, the Treasury said “difficult decisions” had to be made “on tax, spending and welfare to restore economic and fiscal stability” to deal with a “£22bn black hole” in the public finances left by the previous government.
The announcements included £40bn in tax rises, with the big headline the increase in employer National Insurance which will add significant costs to many businesses.
We’ve listed the measures relevant to most businesses at the end of this article. Firstly, here are the announcements specific to the creative industries in the West of England region.
The Budget confirmed that the government will continue to fund the following creative industries programme:
The government said it will provide £3m in funding to expand the Creative Careers Programme, which raises awareness of career routes and tackles skills gaps in the key sector.
The Creative Industries Clusters programme, which has supported creative businesses in nine regional hubs, will continue to provide support over the next six years, with more clusters to be announced. Bristol and Bath was one of the regions supported between 2018 and 2024 through Bristol and Bath Creative R+D.
The Autumn Budget confirmed that the creatives industries is one of eight sectors of focus in the government’s vision for its new industrial strategy.
It has published a green paper and launched a public consultation. Read more details here.
The government said it is providing tax reliefs for the creative sector worth £15 billion over the next five years, and confirmed announcements from the previous government’s Spring 2024 Budget:
From 1 April 2025, film and high-end TV productions will be able to claim an enhanced 39% rate on their UK visual effects costs. UK visual effects costs will be exempt from the credit’s 80% cap on qualifying expenditure, with costs incurred from 1 January 2025 eligible.
The previous government proposed that generative AI would not qualify for the additional tax relief for visual effects, but the new government has dropped that measure.
UK Screen Alliance said the move means that the UK is now set to attract an additional £175m per year of spending on VFX for film and TV, an increase of over 45%, and to create 2,800 new jobs.
Adrian Wootton OBE, chief executive of the British Film Commission, said:
“UK film and TV is globally admired, and a key sector driving economic growth. Our VFX sector is one of the jewels in the UK industry’s crown, with a depth of creative and technical expertise. But these are competitive times. Productions are looking globally for the best talent and incentives to guide their investment decisions.
“Any new measures must address intensifying global competition and help us put our best foot forward. Confirmation of the VFX tax credit increase doubles down on UK strengths and will drive up investment. It is not only welcome, but essential to support our sector and wider UK growth.
“We’re delighted that HM Treasury has listened to industry feedback on generative AI, and included these costs in the overall VFX tax credit enhancement. The BFC pressed for this in our consultation response and we believe this will play an important part in keeping our VFX sector future-proofed and globally competitive.”
From 1 April 2025, UK films with budgets under £15m and a UK lead writer or director will be able to claim an enhanced 53% rate of audio-visual expenditure credit. Expenditure incurred from after 1 April 2024 on films that began principal photography on or after 1 April 2024 is eligible.
From 1 April 2025, the rates will be set at 40% for non-touring productions and 45% for touring productions and all orchestra productions.
Culture Secretary Lisa Nandy said:
“The creative industries will play a critical role in helping us turn the corner and deliver on the national missions of this government – driving economic growth into our towns and cities; drawing on the wealth of talent that exists everywhere; and flying the flag for British culture and values on the world stage.
“The chancellor’s Budget underscored just how important these sectors are going to be with funding extended for vital programmes and tax reliefs, an expansion of the Creative Careers Programme and a £25m investment in the CrownWorks Studio in Sunderland that will make the city one of the centres of our TV and film industry for years to come.
“This government recognises that for millions of people, geography has become destiny. That while talent is everywhere, opportunity is not. This Budget has put the creative industries front and centre of how we write those people back into our national story and drive opportunity, jobs and prosperity into every community, in every region.”
The following are announcements not specific to the creative industries but are of interest to businesses in the sector.
To fund public services, including the NHS and education, the government will increase employer National Insurance.
The rate will increase by 1.2 percentage points to 15% from 6 April 2025. The secondary threshold, the level at which employers become liable to pay National Insurance on each employee’s salary, will reduce from £9,100 per year to £5,000 per year.
To protest the smallest businesses from the National Insurance rise, the employment allowance will increase to £10,500 from £5,000 and be extended to all eligible employers by removing the £100,000 cap.
The government said this will allow firms to employ up to four National Living Wage workers full time without paying employer National Insurance.
The government will increase the lower and higher main rates of Capital Gains Tax (CGT) to 18% and 24% respectively for disposals made on or after 30 October 2024.
Business Asset Disposal Relief, which entrepreneurs pay when they sell all or part of their business, and Investors’ Relief, which reduces CGT on a disposal of shares in a trading company that is not listed on a stock exchange, will increase to 14% from 6 April 2025, and to 18% from 6 April 2026.
The National Living Wage for employees over 21 will increase by 6.7% to £12.21 an hour from April 2025. The government said this represents an increase of £1,400 in the annual earnings of a full-time worker
The National Minimum Wage for 18-20 year olds will rise by 16.3% to £10 an hour, the largest ever increase in both cash and percentage terms.
The government said that intends to create a single adult wage rate over time.
The cap on bus fares in England, due to end on 31 December 2024, will be retained until 31 December 2025, but with a 50% increase from £2 to £3.
From 2026-27, “permanently lower” business rates rates for retail, hospitality and leisure properties in England will be introduced. The government said “this will be funded sustainably by introducing a higher multiplier for the most valuable properties, including distribution warehouses used by online giants”.
Business rates relief for retail, hospitality and leisure businesses in England, up to a cap of £110,000 per business, due to end in April 2025, will be retained for 2025-26. However, it will be cut from 75% to 40%.
The small business multiplier will be frozen in 2025-26.
The government confirmed continued funding for small business finance schemes provided by the British Business Bank including £250m in 2024-25 and 2025-26 for Start Up Loans and the Growth Guarantee Scheme. To boost access to finance for women entrepreneurs, the bank will also invest £50m into female-led funds.
The Budget confirmed that the UK Shared Prosperity Fund, the government’s replacement for EU funding which was due to end in April 2025, will be extended for another year but with reduced funding of £900m.
The government will also continue to fund the Help to Grow: Management course and Growth Hubs in England in 2025-26.
A “Small Business Strategy Command Paper” will be published in 2025 that will “set out the government’s vision for supporting small businesses, from boosting scale-ups to growing the cooperative economy, across key policy areas such as creating thriving high streets, making it easier to access finance, opening up overseas and domestic markets, building business capabilities, and providing a strong business environment”.
Bristol Creative Industries is the membership network that supports the region's creative sector to learn, grow and connect, driven by the common belief that we can achieve more collectively than alone.
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