UK Gov’t Introduces Indie Movie Tax Relief Of 40%
The UK government is to introduce an indie movie tax credit for films that have budgets up to £15M ($19M), along with bringing in business rates relief for big studios and additional VFX relief.
From April 1, the new indie relief will be separate to the pre-existing film and high-end TV tax credit but both will fall under the new Audio-Visual Expenditure Credit system. The local industry has been calling for the move for months. Films will qualify if they pass a “new British film Institute test.” Productions can make claims from April 1 2025 in respect of expenditure incurred from April 1 2024.
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Chancellor Jeremy Hunt also announced in the past few moments that there will be a 5% increase in tax relief for UK VFX costs in film and high-end TV, while the cost cap of 80% will be removed. The government will also consult on the types of expenditure that will be in scope of the additional tax relief and implement the measure through a future Finance Bill, it revealed afterwards in its briefing document.
The business rates relief of 40%, meanwhile, will help major studios such as Pinewood and Sky Studios for at least the next 10 years and will be worth £470M. Sky welcomed the move and said it will help with proposals to extend the new Sky Studios Elstree and allow for the filming of NBCUniversal’s new Jurassic World movie. “Today’s announcement brings confidence to the sector, unlocking job opportunities whilst providing a stable foundation for the investments of tomorrow,” said Sky Group CEO Dana Strong.
The government said the sweeteners in the budget will be worth more than £1B in additional tax relief over the next five years. The government is also funding a £26M upgrade to the National Theatre’s stages and infrastructure, and giving an additional £10M to the National Film & Television School.
Introduced more than a decade ago, the UK’s film and high-end TV tax credit has been hugely successful, bringing numerous shows from major streamers and studios to the nation and making it easier to get local shows off the ground.
The new indie film relief will help a sector struggling with rising costs amidst budgets for the likes of BBC Film and Film4 that have plateaued in recent years.
On the indie film relief, a Pact statement said: “Pact and the BFI have today welcomed the Government’s announcement that it will help to support the UK’s independent film sector by increasing the Film Tax Credit to 40% for films with budgets of £1m to £15m. Both Pact and the BFI believe that the enhanced film tax credit will help strengthen the indigenous film sector’s ability to attract finance and to continue developing key talent which will benefit the wider audiovisual sector.”
BFI Chair Jay Hunt added: “The Government’s new tax credit is a game changer for UK filmmakers, creating jobs and ensuring great British stories continue to be told. By introducing the uplifted rate, the Prime Minister and the Chancellor are fuelling the growth of the wider screen sector that contributes billions to the UK economy.”
Hunt introduced a simplified Audio-Visual Expenditure Credit last year but this only initiated a real terms increase of around 0.5%. He then used his Autumn Statement to decline to raise relief for indie film, which Pact said was a “missed opportunity to remedy a clear market failure.” A consultation has also been launched over whether to extend tax relief to VFX.
In recent months, producers had been telling Deadline that the tax credit is making less of a difference to getting shows off the ground as costs continue to soar. The bosses of The Crown and Doctor Who indies last week told us they are forging lower-budget slates in response to the tricky market.
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