”We have become Europe’s largest film and TV production centre with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here,” said Hunt. ”Studio space in the UK has doubled in the last three years and at the current rate of expansion, next year, we will be second only to Hollywood globally.”
From 1 April, the rate of tax credit will increase by 5% alongside the removal of the 80% cap for VFX costs in the audiovisual expenditure credits (AVEC). Films and high-end TV (HETV) programmes currently have a headline credit rate of 34%. This equates to 25.5% in actual relief, capped at 80% of core expenditure, but with no budget limit. This increase will bring the headline rate to 40%.
PGGB CEO Lyndsay Duthie said: “The government’s acknowledgement of the success of inward investment and commitment to British Film and HETV is highly encouraging, with support echoed across the House. Ensuring the UK’s own pipeline of independent film through the added tax relief is a critical move for domestic film production, helping to protect a sector of the industry key in developing talent and sustaining and creating jobs across the economy. We remain positive that productions will return to previous high levels very soon, utilising the UK’s hugely talented workforce.”
The 40% tax credit will also be rolled out to films with budgets between £1m and £15m, in support of the UK’s indigenous production sector. To qualify for the UK’s creative sector tax incentives, all films, animation and television programmes or video games must be certified as British through the cultural test or qualify as an official co-production.
BFI Chair Jay Hunt said: “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.”
Pact CEO John McVay OBE said: "I’m pleased that the Government has recognised the important role the British independent film sector plays in developing key talent and sustaining jobs across the economy. The sector has reached a critical point and this intervention will provide a lifeline to indie film producers by allowing them to access funding which will attract key creative talent and in turn give them the ability to recoup their initial investment.”
Finally, the new measure will provide security for the major studios in the UK, with a 40% relief on their gross business rates until 2034.
British Film Commission CEO Adrian Wootton OBE said: “Recent increases to studio business rates in England and Wales have threatened to impact the UK’s ability to compete globally. The British Film Commission has worked tirelessly to reflect industry’s concerns to Government and achieve a beneficial outcome for all. The rates relief announced today will help ensure our studios can continue to thrive, planned developments proceed, and the UK continue to attract increasing levels of domestic and global production, maintaining our reputation as one of the best places in the world to make film and TV.”
For more information on the implications of these announcements, and of the Spring Budget as a whole, join PGGB Affiliate Partners Saffery LLP for their free Budget Webinar tomorrow at 8.30am, hosted by Adam Kay.