Animation in United Kingdom

The UK has an internationally renowned and vibrant animation sector, with local producers increasingly looking abroad for opportunities to source funding and export content.

Tax break stimulation

The introduction of a tax break for animation in 2013 has caused a notable rise in production levels among local producers compared to the years previously, when the country’s animation industry had receded dramatically.

An animation production company can now claim a tax relief of up to 25% of qualifying expenditure for qualifying animation programmes in the UK. The project must be an animated programme intended for broadcast, including over the internet, and it may also feature live action. The tax relief is issued by the British Film Institute (BFI).

Arts Council England supports proposals for funding from animators and organisations working with animation. Additional sources of funding include Creative England, BFI Film Fund, BBC Films, Film4, Creative Scotland, Northern Ireland Screen, Ffilm Cymru (Wales), Pinewood and Yorkshire Content Fund. Numerous UK animation companies have also attracted private investment from the government-endorsed Enterprise Investment Scheme (EIS) – which offers tax relief to individual investors who buy new shares in a company.

BBC shoulders responsibility, but changes ahead

The UK animation sector also stands to benefit from a £60m (US$77m) contestable fund, to be administered by the BFI between 2019 and 2022, to help increase the range of children’s television – both live action and animation in the UK.

The intention is that it will stimulate commissions from commercial public service broadcasters ITV, Channel 4 and Channel 5, whose contributions to the UK’s children’s TV industry over the past decade have been in decline, making the BBC the country’s main financier of animated programming. However, slots on the BBC’s children’s channels are highly competitive and there is limited space for new programming.

International broadcasting companies such as Disney, Turner and Viacom – all of which are commissioners of animated programming – have bases in London, while streaming service Netflix has identified the UK as a place where it can base executives to source European animation.

Success exporting IP globally

The country’s animated feature film industry has seen success in recent years with the likes of the Paddington films (2014 and 2017), Shaun the Sheep Movie (2015) and Ethel & Ernest (2016) made by UK companies specializing in animation, post-production and VFX. Animated programming created in the UK, such as Peppa Pig, Digby Dragon, Raa Raa the Noisy Lion and The Amazing World of Gumball, has been broadcast around the world. UK producers have a deserved reputation for their expertise in creating programming for preschoolers in particular, while the country also has a long history of producing eccentric, charming and entertaining stop-motion animation.

Challenges in an uncertain future

The entire sector faces unique challenges as a result of the uncertainty posed by the UK’s exit from the European Union (EU).

20-30% of those working in animation in the UK are EU nationals, while local producers are frequently involved in partnerships with European companies and receive soft funding from the EU that is used to develop new projects. As a result, the sector benefits as a result of the country’s membership of the EU and so could be negatively impacted by Brexit.

Another challenge the local industry faces as production levels continue to increase is a shortage of skilled practitioners, particularly 2D artists, 3D modelers and directors. Failure to provide more of these could threaten the continued growth of the country’s animation sector.

The UK has an internationally renowned and vibrant animation sector, with local producers increasingly looking abroad for opportunities to source funding and export content.

Tax break stimulation

The introduction of a tax break for animation in 2013 has caused a notable rise in production levels among local producers compared to the years previously, when the country’s animation industry had receded dramatically.

An animation production company can now claim a tax relief of up to 25% of qualifying expenditure for qualifying animation programmes in the UK. The project must be an animated programme intended for broadcast, including over the internet, and it may also feature live action. The tax relief is issued by the British Film Institute (BFI).

Arts Council England supports proposals for funding from animators and organisations working with animation.

Additional sources of funding include Creative England, BFI Film Fund, BBC Films, Film4, Creative Scotland, Northern Ireland Screen, Ffilm Cymru (Wales), Pinewood and Yorkshire Content Fund. Numerous UK animation companies have also attracted private investment from the government-endorsed Enterprise Investment Scheme (EIS) – which offers tax relief to individual investors who buy new shares in a company.

BBC shoulders responsibility, but changes ahead

The UK animation sector also stands to benefit from a £60m (US$77m) contestable fund, to be administered by the BFI between 2019 and 2022, to help increase the range of children’s television – both live action and animation in the UK.

The intention is that it will stimulate commissions from commercial public service broadcasters ITV, Channel 4 and Channel 5, whose contributions to the UK’s children’s TV industry over the past decade have been in decline, making the BBC the country’s main financier of animated programming. However, slots on the BBC’s children’s channels are highly competitive and there is limited space for new programming.

International broadcasting companies such as Disney, Turner and Viacom – all of which are commissioners of animated programming – have bases in London, while streaming service Netflix has identified the UK as a place where it can base executives to source European animation.

Success exporting IP globally

The country’s animated feature film industry has seen success in recent years with the likes of the Paddington films (2014 and 2017), Shaun the Sheep Movie (2015) and Ethel & Ernest (2016) made by UK companies specializing in animation, post-production and VFX.

Animated programming created in the UK, such as Peppa Pig, Digby Dragon, Raa Raa the Noisy Lion and The Amazing World of Gumball, has been broadcast around the world. UK producers have a deserved reputation for their expertise in creating programming for preschoolers in particular, while the country also has a long history of producing eccentric, charming and entertaining stop-motion animation.

Challenges in an uncertain future

The entire sector faces unique challenges as a result of the uncertainty posed by the UK’s exit from the European Union (EU).

20-30% of those working in animation in the UK are EU nationals, while local producers are frequently involved in partnerships with European companies and receive soft funding from the EU that is used to develop new projects. As a result, the sector benefits as a result of the country’s membership of the EU and so could be negatively impacted by Brexit.

Another challenge the local industry faces as production levels continue to increase is a shortage of skilled practitioners, particularly 2D artists, 3D modelers and directors. Failure to provide more of these could threaten the continued growth of the country’s animation sector.

Animation UK

Animation UK, a part of UK Screen Alliance, is an advocacy body which provides a collective voice for the Animation and Visualisation sector. Animation UK has been instrumental to the introduction of Animation Tax Credit and the new Industrial Strategy, enduring campaigning for policies which better represent the interests of the sector. Animation UK represents some of the most world-renowned UK animation studios and distributors, such as Aardman Animations, Mackinnon & Saunders and CAKE Entertainment.

Executive Chair: Kate O’Connor