S4C to benefit from annual VAT refund
S4C is expected to benefit from around £15m worth of VAT refunds every year, the Chancellor is expected to announce in the Budget.
From April 2021, it is expected S4C will get the VAT it pays on its costs returned and the move is seen as a clear sign of support for Welsh language and culture by the UK Government.
In a move described as delivering on its promise to level up the UK’s regions and nations, the UK Government will bring S4C’s VAT arrangements into line with UK-wide broadcasters BBC and ITN, as it will be able to recover the VAT it pays on its costs from April 2021.
Chancellor Rishi Sunak said: “S4C has become an integral part of the fabric of Welsh culture. We are determined to support the channel so it can continue to broadcast a variety of programmes for hundreds of thousands of Welsh speakers that watch it every week.”
The UK Government’s Budget pledge is part of its wider plan to support communities across the country, many of whom feel left behind. The public service broadcaster plays a crucial part in the creative industries in Wales. Welsh speakers will continue to be able to enjoy broadcasts in their home language.
The measure delivers on a manifesto pledge to further support the broadcaster, which was founded in 1982 and has an audience of around 665,000 TV viewers throughout the UK every week.
Secretary of State for Wales Simon Hart said: “This announcement would enable S4C to continue its mission to reach the widest audience possible across a range of contemporary platforms.
“With S4C the primary commissioner of Welsh language programming and content, this promises to be a major boost to the sector and helps secure its future.”
The Government says that if S4C were to use its own existing budget to cover its VAT, its future would have been uncertain, with its services potentially being cut. As S4C only commissions Welsh language programming, this is seen as a clear sign of long-term support for Welsh language and culture from the UK Government.
S4C had been relying on funding from the Department for Digital, Culture, Media and Sport’s since April 2019 to cover its VAT payments, after it became unable to recover its VAT costs following a change in its business model.