Introduction of a new UK Independent Film Tax Credit (IFTC)
In the recent Spring Budget, it was announced that UK-qualifying films with a budget up to £15m will now receive tax relief of 40%, thanks to the introduction of the long-awaited UK Independent Film Tax Credit aimed at revitalising the homegrown production sector.
This increase in expenditure credit for UK Independent films within the £15 million budget range (excluding marketing and distribution costs) signifies a significant moment for the industry. Producers and filmmakers have faced growing challenges in financing films of this scale and bringing them to production in the UK.
There will be additional criteria set out by the BFI and the production will need to have one of the following to qualify:
- UK Writer or,
- UK Director or,
- Be certified under an official co-production.
This acknowledgment underscores the essential role that these films play in the broader film ecosystem. They contribute to creative risk-taking, showcase stories reflecting the diversity of the UK, and nurture talent both in front of and behind the camera.
When can it be claimed?
UK Independent Film Tax Credit claims can be submitted to HMRC from 1 April 2025 onwards, for expenses accrued from 1 April 2024, provided a film began principal photography after 1 April 2024.
When making claims, companies are required to complete an additional information form for the applicable timeframe, along with their BFI certificate. The claim will then be submitted as part of the Company Tax Return.
Learn more on the UK Independent Film Tax Credit here
Business rates relief
In addition to this, as outlined in the Budget, business rates for eligible production hubs and studio facilities will be cut by 40% until 31 March 2034. These measures aim to encourage investment in new studio spaces.
The Government’s Spring Budget unveiled a set of initiatives, including a 40% reduction in gross business rates for qualifying film studios in England until 2034, financial support for an expansion of the esteemed National Film and Television School in the UK, and a 5% boost in tax relief for UK visual effects expenses in film and high-end television productions under the Audio-Visual Expenditure Credit (AVEC). Additionally, UK visual effects costs will be excluded from AVEC’s 80% cap on qualifying expenditure.
Author: Mark Horsfield, Business Services Manager, Plus Accounting
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Date published: 15 May 2024