The UK Film and TV industry continues to shine as a global leader in screen production, and the recent Autumn Budget reaffirms the Government’s commitment to supporting its growth. With significant updates and new tax incentives, the changes are set to bolster the sector, providing opportunities for both established players and emerging talent.
At Plus Accounting, we understand the unique challenges and opportunities facing the Film and TV industry. Our expert, Mark Horsfield, breaks down the key announcements and explains how we can support your business in navigating these changes.
New Tax Incentives: What You Need to Know
Visual Effects (VFX) Tax Credit
From 1 April 2025, the introduction of a 39% Audio-Visual Expenditure Credit (AVEC) for UK visual effects costs provides a major boost for VFX-heavy projects. This credit aims to attract large-scale productions to the UK, solidifying the country’s position as a hub for cutting-edge visual effects work.
Audio-Visual Expenditure Credit (AVEC)
The AVEC will replace the existing tax relief system from April 2024, streamlining support for film, high-end TV (HETV), children’s TV, and animation projects under a modern framework. Key rebates include:
- Film and HETV: 34% gross on UK qualifying expenditures (approximately 25.5% net).
- Children’s TV and Animation: 39% gross (around 29.25% net), offering a significant uplift for animated feature films and TV productions.
These changes simplify the process for businesses, ensuring clear benefits across various project types.
Support for Low-Budget Films
Independent filmmakers will welcome the higher rebate rate of 53% for films with budgets under £15 million. Starting in April 2025, this equates to approximately 39.75% net after taxes, addressing financing challenges in the independent film sector and encouraging both domestic and international productions.
Expanded Eligibility Criteria
High-End TV Productions (HETV)
The £1 million-per-broadcast hour minimum expenditure threshold for HETV remains unchanged, maintaining a focus on high-quality content. However, the minimum episode length has been reduced to 20 minutes, broadening eligibility for shorter-format productions, including pilots and limited series.
Animation
For animated projects, at least 51% of the production budget must now relate to animation. Expanded eligibility includes feature-length animated films as well as TV productions, creating more opportunities for studios to benefit from these incentives.
Preparing for Challenges
While these incentives offer exciting opportunities, businesses in the Film and TV sector should also be mindful of rising costs. The increase in the National Minimum Wage and employer National Insurance Contributions (NICs) could create additional financial pressures for smaller production companies and freelance-heavy teams. Effective financial planning will be key to mitigating these challenges. Submission of prompt tax relief claims can be crucial to maintaining the production’s budget and cash flow challenges.
How Plus Accounting Can Help
Navigating these changes requires more than just understanding the numbers—it requires strategic planning to ensure you’re making the most of available opportunities. At Plus Accounting, we specialise in:
- Tax Planning: Helping you maximise rebates under AVEC and other incentives.
- Financial Forecasting: Preparing your business to manage rising costs and budget effectively.
- Compliance Support: Ensuring you meet all tax and reporting requirements.
- Growth Strategies: Identifying opportunities to expand while maintaining financial stability.
Our experience in the Film and TV industry means we can provide tailored advice that aligns with your goals and supports your long-term growth.
Take Action
If you’re in the Film and TV industry, now is the time to review your financial strategy and make sure you’re positioned to take full advantage of the new opportunities.
Contact Mark Horsfield, our Film & TV specialist, today to discuss how we can help your business thrive in this dynamic landscape.
Let’s work together to turn these changes into opportunities for your success.
Author: Mark Horsfield, Business Services Manager, Plus Accounting
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Last Updated: 18 December 2024