New Improved UK Tax Relief Seminar in Cannes

For the third year running, Sargent-Disc and EP Financial Solutions were invited by the UK Film Centre and BFI to co-host a seminar to discuss the current industry climate. This year, on Saturday 17th May, John Hadity (Vice President, EP Financial Solutions) chaired a panel of industry experts to discuss the new enhanced UK Tax Relief in context of their own industry experience.

The Seminar

After introductions, the discussion focussed around clarification on the UK tax relief changes, the benefits of the enhanced tax relief with regard to creativity and co-production and the process involved in qualifying for the tax relief. The session was then followed by a Q&A from the audience.

Watch the full UKFilm - The New UK Tax Relief seminar here > 

From left to right:  John Hadity - Chair, Executive Vice President, EP Financial Solutions. Anna Mansi - Head of Certification, BFI. Isabel Davis - Head of International, BFI. Moses Nyachae - Saffery Champness. Andy Paterson - Archer Street Productions. Credits include: The Railway Man and The Girl with the Pearl Earring.

Clarification of the changes to the UK Tax Relief 

John opened the seminar discussion with a question on how a film can qualify for the UK tax relief. Anna explained the 3 key changes to the UK Tax Relief:

1. The minimum production spend that must take place in the UK has moved from 25% to 10%. 

2. The Cultural Test has moved from 31 points to 35 points with a pass mark of 18 points (previously 16 points) and now extends to European content in line with other creative content tax reliefs.

3. Larger budget films can now receive a higher percentage tax relief on the first £20m production spend in the UK. Previously set at 20% this has now increased to 25%.

Benefits of the enhanced tax relief

- Overall it was felt that the changes provide a more flexible set-up than the previous UK tax relief.

- The enhanced Cultural Test mean producers are more inclined to use the UK for post production and VFX as well as principle photography and production. This is due to the flexible nature of the enhanced Cultural Test with an increase in points now available for special and visual effects, English language, UK/EU cast and crew and principle photography.

- The change from a qualifying production spend from 25% to 10% in the UK gives producers a more flexible approach to which stage of production is carried out within the UK. Shame (Dir. Steve McQueen, Film4 & See-Saw Films) was used as an example of a film that was shot entirely in the US but moved to the UK for post-production, and was therefore able to qualify for UK tax relief.

- Andy Paterson highlighted the relationship between tax credits and creativity. Using his own experience, he explained producers should be wary of changing the creative to fit the requirements of a country's tax credit, as it inevitably affects the finished product. He praised the UK tax relief for being flexible and logical. A Production can shoot worldwide as long as it's a UK Ltd company and meets the 10% qualifying production spend for the UK.

"Putting a little bit of money at the bottom gets a huge amount of economic activity at the top" - Andy Paterson highlighting the logical approach to the UK enhanced tax relief.

Requirements needed to qualify for UK tax relief

Moses, an expert in the UK tax credit system, explained there are four key parts to qualifying for the UK tax relief:

1. The production must pass the qualifying test with 18 points out of a possible 35.

2. The production must be set up as a UK company which is responsible for the whole film. HMRC will always pay tax credit to the UK company, never to individuals.

3. There must be a minimum spend of 10% of the total production budget in the UK.

4. The production must demonstrate the intention for theatrical release.

Q&A 

The seminar ended with a Q&A session where industry professionals were able to raise their thoughts and concerns. One producer asked when the UK Tax Relief can be claimed? Unlike other countries, such as Australia, the UK tax relief can be accessed flexibly.

Another question raised was the hot topic of whether the UK is getting too busy as a production location? Is there an issue with studio space? Anna and Isabel reassured the audience that the UK offers a variety of options including Northern Ireland and Scotland.

It's good to be busy and see the UK Film industry thriving!

International Producers Reception

The seminar was followed by an International Producers Reception which was an opportunity for producers from across the globe to network.

Special thanks to The Producers Guild of America, The British Film Institute, The Independent Film and Television Alliance, The Producers Alliance of Cinema and Television, The Production Guild of Great Britain and The Association of Film Commissioners International for their support.

The reception was a great success and Sargent-Disc look forward to hosting something similar next year.