A SIC note for post-production

28 October 2020

Statistics are the lifeblood of our advocacy work. They provide the evidence for change. The government collects data on businesses through the Office of National Statistics (ONS) but we have found that 30% of businesses in the post-production and VFX sector are incorrectly classified outside of our sector. This means that the number of enterprises in our sector, their turnover, jobs created and value to the UK economy are significantly under counted and therefore under recognised by government.

We estimate that there is about £300 million of UK turnover that is not recognised as post-production because it’s incorrectly classified.

How does this occur?

Each year a company has to provide a Confirmation Statement to Companies House, which lists its directors and persons with significant control etc. It used to be called your Annual Return. It also asks the company to provide its Standard Industrial Classification code, known as its SIC.

ONS use this SIC to place the vital statistics of companies into standardised industrial sectors. Then your figures are gleaned from business surveys, Companies House filed accounts, VAT returns and PAYE records, and are totalled with other business within that SIC.

If you want to what the figures look like, check out our industry data webpage.

How can I check my SIC code?,

It’s easy to check a company’s SIC code as it is publicly available on the Companies House website. We’ve noticed that many of you may be using the wrong code. It’s an easy mistake to make as unless you are familiar with the structure of the codes, it’s quite hard to find the optimal SIC for your business. The Film and TV codes are actually listed under Section J – Information and Communications rather than Section R – Arts, Entertainment and Recreation, where you might expect to find them.

Does it affect my business if I have the wrong code?

In short, no. It doesn’t stop you operating your business in the wrong sector, in the way that operating outside of the business sectors in your Memorandum and Articles of Association might. It also doesn’t affect the way you business is taxed.

So why is it important that I have the right SIC code?

If you want your sector to be successful and for your business to have the best conditions to flourish, we need to have the best quality evidence available for the government to make decisions about what affects you. ONS have privileged access to a lot of confidential sources that we cant see, so they are in the best position to measure our sector, so let’s make sure they are counting everyone.

So what is the right SIC for my company?

  • If your primary business is post-production or VFX, the right SIC code for you is definitely 59120 which covers “Motion picture, video and television programme post-production activities”. It shouldn’t be 59111, 59112 or 59113 which are for “Motion picture, video and television programme production activities”, unless your business is creating IP rather than servicing its creation.
  • If you are primarily involved in studios or location services there’s no specific code so 59111, 59112 or 59113 are the best fit depending on whether you work in film, video or television, but then your turnover is being lumped in with all the production companies.
  • Animation companies have more choice. Feature animation falls into 59111 and TV animation could be 59113. However if your animation business is mostly service work rather than IP creation, then 59120 is for you.
  • 60200 for “Television programming and broadcasting activities” is meant for broadcasters not for post-houses specialising in broadcast.
  • If you are an NLE hire company, 77390 for “Renting and leasing of other machinery, equipment and tangible goods not classified elsewhere” might look right, but if your hire business model is veering toward being a pop-up-post facility, then consider reporting your turnover within SIC Code 59120.
  • Facilities specialising in audio-for-picture should also be using 59120 for post-production rather than 59200 for “Sound recording and music publishing activities” which connects you with music industry rather than the screen sector.
  • Using SIC 90030 for “Artistic Creation” puts your turnover in a “catch-all” category which is at least part of the creative industries but denies the screen sector an estimated total of £29.7 million of your valuable turnover.
  • There are some of you using even more generic SIC Codes that means your combined £84 million of turnover is not even allocated to the creative sector at all. Please don’t use these when there are much better alternatives. These include;
    • 62090 – Other information technology service activities
    • 74909 – Other professional, scientific and technical activities not classified elsewhere
    • 82990 – Other business support service activities not classified elsewhere
    • 96090 – Other service activities not classified elsewhere.

How do I change my SIC Code?

It’s simple. Next time you annual Confirmation Statement date comes round, if you need to change your SIC simply update it online at Companies House. You could do it now if you wanted to without waiting for you Confirmation Date, but it would cost you £13.

Can I have more than one SIC?

Yes you can if your business does multiple activities. You can have up to 4 SIC codes. We don’t recommend this as we can’t see how ONS apportions your figures accurately between the different SICs, other than doing it equally. If one code fits for most of your business use that, rather than multiple codes for all your secondary services.

The Government pays far more attention to their own official statistics than to any research that we might submit. At a time when we have big economic challenges, please review your SIC Code when you submit your Confirmation Statement and amend if necessary so that our sector’s value is not being under-reported. Thank you.

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