HM Government Boost UK Film Tax Relief

In the 2013 Autumn Budget Statement, Her Majesty's Government announced three key enhancements to UK Film Tax Relief. These are:

• the extension of the top rate of tax relief (25%) on the first £20 million of qualifying production expenditure to all UK films. This will eradicate the 'cliff edge' of previous 20% and 25% tax relief schemes and increase the value of the UK Tax Credit by £1million on films made for over £20 million with the appropriate level of qualifying expenditure. Relief will be at 20% on additional qualifying expenditure;
• a reduction to the minimum UK production spend requirement from 25% to 10%;
• an expansion of the Cultural Test to allow for European as well as British culture, using an 18 out of 35 point test.

The proposed modernisation of the UK Film Tax Relief and the Cultural Test should encourage increased film investment into the UK, enhance opportunities for Britain's visual effects sector and facilitate co-production. The changes are due to be operational on or after 1 April 2014 subject to European Union state aid approval.

The enhancements to UK Film Tax Relief are welcome news to the VFX community. Double Negative's Managing Director Alex Hope commented that the Government's intervention will help to ensure that the UK 'can deliver that end to end service to its clients wherever they are in the world and also, crucially, to allow British independent filmmakers to benefit ....' Source: Geoffrey Macnab, Screen Daily

For information on how to currently qualify a film, television or animation production as British and available UK Tax Relief read our insight articles UK Film Tax Relief and New Creative Industries Tax Reliefs

For other international film tax credit updates go to our affiliate EP Financial Solutions' website.