Animation in UK
The UK animation industry is a powerhouse of both creativity and economic potential, producing high-quality content seen around the world.
High quality and original storytelling
The UK boasts an internationally renowned and vibrant animation sector, contributing £1.7bn to the UK economy, with over 13,000 employees and freelancers producing animated content for television, streaming, feature films, commercials, websites, games and virtual and augmented reality in hubs around the country.
With more than 300 studios actively working in animation for children’s and family audiences, UK studios and distribution companies have a long history of successfully exporting their animated content such as Peppa Pig and Hey Duggee around the world. The UK is particularly well-known for its expertise in stop-motion animation.
Notable examples of UK animation include the Oscar-winning The Boy, the Mole, the Fox & the Horse as well as half-hour specials such as The Snowman and The Gruffalo. UK animation talent has contributed to the huge box office success of feature films such Paddington, Jungle Book and The Lion King.
The UK is home to numerous animation festivals and events, such as the London International Animation Festival, Manchester Animation Festival and the Children’s Media Conference, which attract interest from around the world.
A variety of funding tools
A tax break for animation, introduced in 2013 by the British Film Institute (BFI), has stimulated a significant rise in production levels among local producers. This has been joined by a tax relief aimed at independent feature films that is expected to propel animation production in the UK even further.
This existing regime of tax credits is being replaced by a system of Audio Visual Expenditure Credits (AVEC) which, at a net rate of 29.25%, will offer a small uplift in value for film and high-end TV production and significantly better value for animation. This rises to 40% for features with a budget under £15m. The AVEC will be available on qualifying UK expenditure up to a maximum of 80% of the total production budget.
An increase in animated feature production is significant to the sector, mirroring a global increase in commissioning and the UK’s escalating capability to produce them. Recent investments and commissions by UK studios such as Locksmith Animation and Aardman have contributed to this progress.
There are a variety of different sources of funding for animated content in the UK, including the Global Screen Fund, BBC Ignite and BFI National Lottery Short Form Animation Fund. Creative Scotland, Creative England, Yorkshire Content Fund, Northern Ireland Screen and Ffilm Cymru (Wales) also offer funding opportunities.
At the time of writing, a replacement fund for the BFI Young Audiences Content Fund, which ran as a pilot program between 2019 and 2022 and helped stimulate the commissioning of distinctive animated projects such as Don’t Hug Me I’m Scared, is currently in development.
Numerous UK animation companies have attracted private investment from the government-endorsed Enterprise Investment Scheme (EIS). This offers tax relief to individual investors who buy new shares in a company.
Underinvestment threatens to stifle growth
The BBC, and its children’s brands CBeebies, CBBC and iPlayer Kids, are crucial to the UK’s animation ecosystem, especially as commissions of animated series from commercial public service broadcasters, such as ITV, Channel 4 and Paramount-owned Channel 5 have been in decline over a number of years, in common with other countries.
Meanwhile, the UK’s production sector has been one of the main beneficiaries of the boom in streaming, with the likes of Netflix, Amazon and Apple all commissioning local content out of the UK. YouTube has grown to become the dominant platform for freely available children’s content in the UK and, in 2021, its ordered original kids shows from numerous UK-based companies.
However, with audiences watching more content online, it is becoming harder to finance high-end animated productions through traditional means, with broadcaster budgets being cut and funding from newer digital players difficult to rely on. Brexit, meanwhile, has posed significant challenges, but solutions have been sought to ensure the industry remains resilient.
The UK animation industry is a powerhouse of both creativity and economic potential, producing high-quality content seen around the world.
High quality and original storytelling
The UK boasts an internationally renowned and vibrant animation sector, contributing £1.7bn to the UK economy, with over 13,000 employees and freelancers producing animated content for television, streaming, feature films, commercials, websites, games and virtual and augmented reality in hubs around the country.
With more than 300 studios actively working in animation for children’s and family audiences, UK studios and distribution companies have a long history of successfully exporting their animated content such as Peppa Pig and Hey Duggee around the world. The UK is particularly well-known for its expertise in stop-motion animation.
Notable examples of UK animation include the Oscar-winning The Boy, the Mole, the Fox & the Horse as well as half-hour specials such as The Snowman and The Gruffalo. UK animation talent has contributed to the huge box office success of feature films such Paddington, Jungle Book and The Lion King.
The UK is home to numerous animation festivals and events, such as the London International Animation Festival, Manchester Animation Festival and the Children’s Media Conference, which attract interest from around the world.
A variety of funding tools
A tax break for animation, introduced in 2013 by the British Film Institute (BFI), has stimulated a significant rise in production levels among local producers. This has been joined by a tax relief aimed at independent feature films that is expected to propel animation production in the UK even further.
This existing regime of tax credits is being replaced by a system of Audio Visual Expenditure Credits (AVEC) which, at a net rate of 29.25%, will offer a small uplift in value for film and high-end TV production and significantly better value for animation. This rises to 40% for features with a budget under £15m. The AVEC will be available on qualifying UK expenditure up to a maximum of 80% of the total production budget.
An increase in animated feature production is significant to the sector, mirroring a global increase in commissioning and the UK’s escalating capability to produce them. Recent investments and commissions by UK studios such as Locksmith Animation and Aardman have contributed to this progress.
There are a variety of different sources of funding for animated content in the UK, including the Global Screen Fund, BBC Ignite and BFI National Lottery Short Form Animation Fund. Creative Scotland, Creative England, Yorkshire Content Fund, Northern Ireland Screen and Ffilm Cymru (Wales) also offer funding opportunities.
At the time of writing, a replacement fund for the BFI Young Audiences Content Fund, which ran as a pilot program between 2019 and 2022 and helped stimulate the commissioning of distinctive animated projects such as Don’t Hug Me I’m Scared, is currently in development.
Numerous UK animation companies have attracted private investment from the government-endorsed Enterprise Investment Scheme (EIS). This offers tax relief to individual investors who buy new shares in a company.
Underinvestment threatens to stifle growth
The BBC, and its children’s brands CBeebies, CBBC and iPlayer Kids, are crucial to the UK’s animation ecosystem, especially as commissions of animated series from commercial public service broadcasters, such as ITV, Channel 4 and Paramount-owned Channel 5 have been in decline over a number of years, in common with other countries.
Meanwhile, the UK’s production sector has been one of the main beneficiaries of the boom in streaming, with the likes of Netflix, Amazon and Apple all commissioning local content out of the UK. YouTube has grown to become the dominant platform for freely available children’s content in the UK and, in 2021, its ordered original kids shows from numerous UK-based companies.
However, with audiences watching more content online, it is becoming harder to finance high-end animated productions through traditional means, with broadcaster budgets being cut and funding from newer digital players difficult to rely on. Brexit, meanwhile, has posed significant challenges, but solutions have been sought to ensure the industry remains resilient.
Animation UK
Animation UK provides the collective voice of the animation sector, representing production companies, studios, distributors and service providers. Animation UK has highlighted the cross-sector strengths of the animation sector and worked on behalf of the animation industry to campaign for the introduction of the Animation Tax Credit, which successfully came into force in early 2013. It has more recently successfully lobbied for the uplifts announced in 2023 and 2024 and has spearheaded the drive for greater investment in animation from public sources.
Animation UK will continue to press for other economic and business policy changes and incentives to ensure the sector remains competitive. Animation UK also supports exporting activity and is working with all partners to develop a skills and talent pipeline. Animation UK advocates for the sector internationally and remains a proud member of Animation in Europe.
Executive chair: Kate O’Connor