Polymer thin films that emit and absorb circularly polarised light have been demonstrated with the promise of achieving important technological advances; from efficient, high-performance displays, to 3D imaging and all-organic spintronic devices. However, the origin of the large chiroptical effects in such films has, until now, remained elusive. We investigate the emergence of such phenomena in achiral polymers blended with a chiral small-molecule additive (1-aza[6]helicene) and intrinsically chiral-sidechain polymers using a combination of spectroscopic methods and structural probes. We show that – under conditions relevant for device fabrication – the large chiroptical effects are caused by magneto-electric coupling (natural optical activity), not structural chirality as previously assumed, and may occur because of local order in a cylinder blue phase-type organisation. This disruptive mechanistic insight into chiral polymer thin films will offer new approaches towards chiroptical materials development after almost three decades of research in this area.