Animation Trends 2012: Firms positive about George Osbourne's tax breaks, but have reservations

We could see an upsurge in UK-based animation next year when the Corporation Tax Credits scheme is extended to cover animation production. Much of the kudos for this should go to the campaign group Animation UK. Chaired and tirelessly championed by Oli Hyatt of London studio Blue-Zoo, its members include British animation companies and firms that work closely with them, ranging from the largest players in the industry to niche set-ups.

Last September, the group presented a report claiming that UK animation was in danger of becoming financially unviable. Then in February Oli and the report’s co-authors met with chancellor George Osborne and Ed Vaizey, the minister for culture, communications and the creative industries. Within a few weeks the group’s efforts were rewarded with the announcement in the budget that corporation tax reliefs, based on those enjoyed by the UK film industry, should be extended to the animation industry in 2013.

The feedback has been hugely positive, says Oli. “People are looking to make future productions here. Should we be able to strike the right balance in the legislation, everyone believes it will be a big game changer.”

Simon Armstrong of Ticktockrobot in Brighton feels the UK is still a benchmark for creativity and production, and that the animation sector here could grow phenomenally with the right incentives. For Edinburgh-based 2D animator Iain Gardner, the new measures “should help create a level playing field between the UK and competitors like Ireland”.

There are, however, key issues that remain to be addressed, including how wide-ranging the tax breaks will be. “Many say they should include online content,” says Oli. “But how do you define this?” Defining animated programming is also going to be difficult: when does something cease to be animation and become special effects or graphics?

Other potential stumbling blocks could lie in getting the tax reliefs approved at a European level, one sticking point being whether they constitute state aid or not. “This is certainly not a done deal,” Oli cautions.

Animation trends 2012


1) Stop motion animation is hip again

2) Interest in hand-crafted animation grows

3) Combine animation with programming

4) Children's TV animation rediscovers its craft roots

5) Photorealistic CG meets traditional animation

6) Animation firms positive about George Osbourne tax breaks, but have reservations

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