• April 2016

    WedThuFriSatSunMonTueTax week
    --1   2   3   4   5   52
    6   7   8   9   1011121
    131415161718192
    202122232425263
    27282930---4
    • 6th - Start of 2016-2017 tax year
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
  • May 2016

    WedThuFriSatSunMonTueTax week
    ----1   2   3   4
    4   5   6   7   8   9   105
    111213141516176
    181920212223247
    252627282930318
    • 2nd - May Bank Holiday (E,W,NI,S)
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
    • 30th - Spring Bank Holiday (E,W,NI,S)
    • 31st - Employee P60s due
  • June 2016

    WedThuFriSatSunMonTueTax week
    1   2   3   4   5   6   7   9
    8   9   101112131410
    1516171819202111
    2223242526272812
    2930-----13
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
  • July 2016

    WedThuFriSatSunMonTueTax week
    --1   2   3   4   5   13
    6   7   8   9   10111214
    1314151617181915
    2021222324252616
    2728293031--17
    • 6th - Forms P11D, P11D(b) and P9D due
    • 6th - Form 42 Due
    • 12th - Battle of the Boyne - Bank Holiday (NI)
    • 19th - HMRC cheque payments due
    • 19th - Payment of 2015/16 Class 1A NIC due
    • 22nd - HMRC BACS payments due
    • 31st - Payment of 2015/16 Class 2 NIC due
  • August 2016

    WedThuFriSatSunMonTueTax week
    -----1   2   17
    3   4   5   6   7   8   9   18
    1011121314151619
    1718192021222320
    2425262728293021
    31------22
    • 1st - Summer Bank Holiday (S)
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
    • 29th - Summer Bank Holiday (E,W,NI)
  • September 2016

    WedThuFriSatSunMonTueTax week
    -1   2   3   4   5   6   22
    7   8   9   1011121323
    1415161718192024
    2122232425262725
    282930----26
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
  • October 2016

    WedThuFriSatSunMonTueTax week
    ---1   2   3   4   26
    5   6   7   8   9   101127
    1213141516171828
    1920212223242529
    262728293031-30
    • 5th - Personal Income Tax Statement
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
    • 31st - Paper Self Assessment Tax Return Deadline
  • November 2016

    WedThuFriSatSunMonTueTax week
    ------1   30
    2   3   4   5   6   7   8   31
    9   10111213141532
    1617181920212233
    2324252627282934
    30------35
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
    • 30th - St. Andrew's Day (S)
  • December 2016

    WedThuFriSatSunMonTueTax week
    -1   2   3   4   5   6   35
    7   8   9   1011121336
    1415161718192037
    2122232425262738
    28293031---39
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
    • 25th - Christmas Day
    • 26th - Boxing Day
  • January 2017

    WedThuFriSatSunMonTueTax week
    ----1   2   3   39
    4   5   6   7   8   9   1040
    1112131415161741
    1819202122232442
    2526272829303143
    • 1st - New Year's Day
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
    • 31st - Online Self Assessment Tax Return Due
  • February 2017

    WedThuFriSatSunMonTueTax week
    1   2   3   4   5   6   7   44
    8   9   101112131445
    1516171819202146
    2223242526272847
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
  • March 2017

    WedThuFriSatSunMonTueTax week
    1   2   3   4   5   6   7   48
    8   9   101112131449
    1516171819202150
    2223242526272851
    293031----52
    • 17th - St. Patrick's Day (NI)
    • 19th - HMRC cheque payments due
    • 22nd - HMRC BACS payments due
    • 14 - Good Friday (E,W,NI,S)
    • 17th - Easter Monday (E,W,NI)
UK Tax Week

   22 Mar - 28 Mar

15

 
 

UK Film Tax Relief

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Summary

In the 2015 Budget, the Chancellor of the Exchequer announced his intention to increase the value of the UK Film Tax Relief to 25% for films of all budget levels. Following EU State Aids approval, the exhanced relief is available to films made from April 2015 onwards. Fiscal incentives are an essential element of international film financing and Sargent-Disc has produced a guide to qualifying a film as British and the UK film tax relief system - we hope you find it useful.

Tagged: Accounting, Budgeting

UK film tax relief

The UK's Film Tax Relief system was introduced in 2007 and is widely acknowledged to be an essential part of financing for domestic and international films shooting in the UK. Following EU State Aid approval of 25% UK Film Tax Relief to films of all budget levels, we explain the UK tax credit, the requirements for qualification and its value.

The requirements

The following rules apply in order to gain the UK tax relief:

  • The film needs to be British qualifying. It must either pass the cultural test or qualify as an official co-production;
  • The film must be intended for theatrical release;
  • The film, whether a cultural test or co-production film, must reach a minimum UK qualifying production spend requirement of 10%;
  • The Film Production Company (FPC) (1) responsible for the film needs to be within the UK corporation tax net.


British qualification

In order for a FPC to claim tax relief, the film needs to qualify as British by meeting the requirements of one of the following:

  • The Cultural Test
  • One of the UK's official bilateral co-production treaties
  • The European Convention on Cinematographic Co-production

 

Cultural Test

The Cultural Test is made up of four sections:
A) Cultural content
B) Cultural contribution
C) Cultural hubs
D) Cultural practitioners


Each section has a number of points allocated to it. A film needs to score 18 out of a possible 35 points, subject to a 'golden points rule':


A film with 19 points from sections A4 (6), C (5) and D (8) must have scored 2 or more points in A1 and/or A2, or have scored 4 points in A3 to pass the cultural test. 

 

Section

Cultural Test

Points

A

Cultural Content

A1

Film Set in the UK

4

A2

Lead characters British citizens or residents

4

A3

Film based on British subject matter or underlying material

4

A4

Original dialogue recorded mainly in English or UK indigenous language or EEA language

6

B

Cultural Contribution

B

Film demonstrates British creativity, British heritage and/or British diversity

4

C

Cultural Hubs

C1

(a) & (b) At least 50% of the principal photography or SFX or VFX takes place in the UK

(c) An extra 2 points can be awarded if at least 80% of principal photography or VFX or SFX takes place in the UK

2

 

2

C2

Music Recording/Audio Post Production/Picture Post Production

1

D

Cultural Practitioners (UK or EEA citizens or residents)

D1

Director

1

D2

Scriptwriter

1

D3

Producer

1

D4

Composer

1

D5

Lead Actors

1

D6

Majority of Cast

1

D7

Key Staff (lead cinematographer, lead production designer, lead costume designer, lead editor, lead sound engineer, lead visual effects supervisor, lead hair and makeup supervisor)

1

D8

Majority of Crew

1

All sections

Pass Mark 18

Total Points 35

 

Co-production

Films made as official co-productions either under a bi-lateral treaty or the European Convention on Cinematographic co-production are not required to pass the Cultural Test, but instead must follow the requirements within the treaty.


The UK currently has eleven active bi-lateral treaties with: Australia; Canada; China; France; India; Israel; Jamaica; Morocco; New Zealand and South Africa. It has also signed a treaty with Brazil which is subject to consitutional procedures in both countries before it can be ratified and come into force. The UK is also one of many countries signed up to the European Convention on Cinematographic co-production.

 

 

Value of the relief

Film production companies can claim a payable cash rebate of up to 25% of qualifying UK film production expenditure.

Qualifying UK production expenditure is the lower of either:

  • 80% of total core expenditure; or
  • the actual UK core expenditure incurred.

HM Revenue & Customs' (HMRC) definition of UK spend includes the concept of where a good or service is "used or consumed" (2). If they are used or consumed in the UK, the expenditure is treated as UK expenditure . If they are used or consumed outside the UK, they do not count as UK expenditure. This spend can take place during pre-production, principal photography and co-production, and is irrespective of the nationality of the persons carrying out the activity.

 

How can Sargent-Disc help?

Sargent-Disc can provide a range of services to a production, from pre-production through to post. For information about our services, please contact us at Sargent-Disc. Let us help you with your production and employment enquiries about working in the UK, and take the drama out of your production. Our services include:

Budgeting

Movie Magic Budgeting and Scheduling software

Payroll & Auto Enrolment

Digital Purchase Order

Production card

Production and post production accounting

Production software training


Movie Magic Budgeting

Industry standard software is available to help when putting together a budget. Movie Magic Budgeting 7 , for example, has been designed to assist with complex budgeting scenarios. It allows for elements to be pulled through from Movie Magic Scheduling, helping to save time and ensure accuracy. It also allows for multiple incentives, credits, and rebates to be applied, compared, and analysed.

 

Advisors

For advice, guidance and facts about international production incentives, and to compare them online, visit the incentive solutions section of the Entertainment Partners website or contact them directly here:

 

EP incentives

Entertainment Partners
Incentives Solutions Group

Joseph Chianese, Senior Vice President
Tel: 818.955.6242
Email: jchianese@entertainmentpartners.com

There are also a number of specialist accountancy and audit firms in the UK that advise clients when structuring British qualifying films. Here are just a few:

Grant Thornton UK LLP
Christine Corner, Partner
Tel: +44 (0)20 7728 3171
Email: christine.corner@uk.gt.com

Saffery Champness
John Graydon, Partner
Tel: +44 (0)20 7841 4281
Email: john.graydon@saffery.com

Shipleys LLP
Steve Joberns, Principal
Tel: +44 (0)20 7312 6558
Email: jobernss@shipleys.com

 

Further Information


The British Films Certification Department is based at the BFI and works with producers on qualifying films as British

The British Film Commission is able to assist international productions when planning to shoot in the UK, including advising on the tax relief.

HMRC's Film Tax Unit can advise on the tax rules for film production in the UK

 

 

References

(1) HMRC definition of Film Production Companies

(2) HMRC definition of Used or Consumed

 

Please Note: This article is for information purposes only.

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