The Government’s 2025 Budget contains a number of different interventions that will have an impact on the UK’s creative industries, spanning R&D, skills and business rates. Here, the Creative PEC Policy Unit digests some of the key findings relevant to our sectors.
R&D and Innovation
The Government reconfirmed that it is increasing R&D investment to £22.6bn a year by 2029-30, with UKRI dedicating nearly £9bn to supporting the Industrial Strategy’s eight priority sectors. It also confirmed that UKRI’s £500mn R&D Missions Accelerator programme announced in the Industrial Strategy will advertise challenges to derive economic returns from UK cultural assets.
Alongside this, small- and medium-sized businesses will now have the opportunity to get clarity on their R&D tax relief claims prior to their submission to HMRC. This targeted advance assurance service will be piloted from 2026. Our research has previously highlighted that creative industries firms are far more likely to identify R&D opportunities compared to across the wider economy, so these interventions have the potential to have a positive impact on the growth potential of the sector.
Creative industries firms will also receive clarity when it comes to the treatment of intra-group payments made in return for surrendered R&D Expenditure Credits, Audio-Visual Credits and Video Games Expenditure Credits. Intra-group payments are where a company surrenders an amount from these tax credits to another company in the same group, with the latter making a payment to the surrendering company in turn. Essentially, the payment made in return will now be ignored when calculating the profits of the surrendering company for Corporation Tax. This should reduce uncertainty or disputes with HMRC around whether intra-group payments are taxable. Detailed guidance on this can be found here.
Alongside the Budget, the Treasury also published a supplementary document, Entrepreneurship in the UK, outlining efforts to support start-ups and scalers. UKRI investment is seen as key to this, with £1.5bn being devoted to research that has the potential to spin out into successful enterprises.
Access to Finance
In one major intervention for the creative industries, the Government has asked the British Business Bank (BBB) to investigate whether it can support IP-backed lending via its existing financial guarantee. This represents a clear positive for the sector and is in line with recommendations Creative PEC researchers made in our Growth Finance in the Creative Industries State of the Nations report.
The investment limit for Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) will increase to £10mn, rising to £20mn for Knowledge Intensive Companies (KICs). This has the potential to help creative firms that have moved beyond their start up phase. However, VCT income tax relief will be reduced from 30% to 20% in order to redirect funds to high-growth companies. The VCT is designed for smaller, higher risk enterprises, which may have an impact on creative firms who might be more reliant on IP. However, this may be compensated by the abovementioned announcement on the BBB’s work around financing and IP.
Skills and Apprenticeships
£725mn will be provided for the Growth and Skills Levy, with the commitment that SME apprenticeships will be fully funded for eligible workers under 25 years of age. The government also outlines some ways that it might simplify the apprenticeship system, including the shortening of the levy expiry window from 24 to 12 months. This may have the effect of more quickly redirecting levy funds to creative SMEs looking to hire apprentices. The government states that further announcements on the Growth and Skills Levy will be announced in the coming months. Apprentices will also receive a National Minimum Wage boost of 6% to £8.00 an hour.
Devolution
As part of its devolution drive, the Government has committed to giving mayors in England powers to introduce a visitor levy on accommodation within their authorities following campaigning from the culture sector and Mayors. A consultation on the measure is now live, with a closing date of 18th February 2026.
Integrated settlements for seven combined authorities in England were published alongside the Budget. The six MCAs outside London will each receive £25m shares of the £150m Creative Places Fund announced in the summer, which will help mayors to drive finance, mentoring and networking opportunities throughout their regions.
Northern Growth Corridor
The Government also provided more detail on the planned Northern Growth Corridor mentioned in the Industrial Strategy. The Corridor will ‘maximise potential’ across the eight priority Industrial Strategy sectors, including the creative industries, with the government working with local businesses and policy makers to drive investment opportunities. Tom Riordan has been made envoy for the Corridor and will develop a plan in collaboration with devolved leaders, universities and businesses.
AI and Technology
The Government will establish AI Growth Zones in Scotland and Wales. It announced a new Growth Zone in South Wales, set to bring 5,000 jobs in the next decade, adding to the previous announcement for North Wales. Welsh businesses will receive support to scale and commercialise new technologies and UKRI will invest £4mn a year to help academic entrepreneurs develop spin-outs from their research. The Budget also reconfirmed its commitment to appointing AI Sector Champions to drive adoption across the eight Industrial Strategy priority sectors, announcing appointees for Business and Professional Services and Advanced Manufacturing, though a Creative Industries Champion is yet to be announced.
Read more from Creative PEC’s policy team.
