Written by Kianna Best on Mar 7, 2024. Posted in Incentive News

UK Government announces significant tax benefits for studios, indie films and VFX

Yesterday during the reading of the UK governments spring budget, Chancellor of the Exchequer Jeremy Hunt unveiled significant benefits for the creative industry. Amongst those, UK film and television studios will receive a 40% corporate tax relief through 2034, and independent films will receive the same percentage for qualifying projects with a budget of up to GBP 15 million.

Polite Society; Image courtesy of Focus Features

“We have become Europe’s largest film and TV production center, with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here,” Hunt said. “Studio space in the U.K. has doubled in the last three years, and at the current rate of expansion, next year we will be second only to Hollywood globally.”

As the UK prepares to host upcoming flick Jurassic World 4, with filming taking place at Elstree North,  the UK budget’s boost of the industry could not be more timely. During the announcement of the spring budget, Hunt announced a 40% corporate tax relief for film and television studios across the UK. Available until 2034, this tax cut will manifest into a total worth of approximately GBP 47 million. The UK also welcomes a VFX tax credit increase of 5% and the removal of the 80% expenditure cap.

After cries last year from the independent film sector and a trajectory of “heading to market failure, the budget also took this into account. In a move much greater than expected, but necessary, nonetheless, the UK government have offered a 40% tax credit for independent films shot in the UK with a budget of up to GBP 15 million. The new tax credit will be available to independent film productions only that begin principal photography from 1 April 2024.

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.”

Responding to yesterday’s  Budget Statement from the Chancellor of the Exchequer, Adrian Wootton OBE, chief executive of the British Film Commission, said: “Today’s announcements demonstrate timely and welcome action by Government, which will significantly boost the UK’s world-class film and TV industry in the face of growing international competition.