The Chancellor of the Exchequer George Osborne announced last week that a new higher rate of film tax relief has been given the go ahead by the EU.
Under the new plans the £1.4 billion film industry will receive a tax credit of 25 per cent on all qualifying expenditure bringing it in line with TV tax relief. This means a British film costing £40 million will receive an additional £1 million towards productions costs from the change.
The Chancellor announced the scheme, which will be backdated to apply from April 2015, whilst visiting the set of Agatha Raisin, a new British TV series being filmed in Wiltshire that is benefiting from the government’s high-end TV tax relief. Under the scheme the government provides a tax credit of 25 per cent on qualifying British TV productions.
“The film tax relief is a key ingredient in the UK’s winning combination of outstanding filmmaking talent and crews, world-leading studios and facilities, and iconic locations,” said British Film Institute (BFI) CEO, Amanda Nevill. “It keeps us competitive on the world stage, and helps grow our economy and create jobs at home. We warmly welcome this extension to the tax relief and the government’s continued commitment to the UK’s thriving film industry.”
The UK’s creative sector industries employs 1.7 million people and added £76.9 billion to the economy last year. According to official BFI statistics, 222 films started principal photography in 2014, spending £1.4 billion in the UK, an increase from £1.1 billion in 2013 and the highest figure on record.
Ivan Dunleavy, chief executive, Pinewood Group commented: “The Chancellor’s announcement of further enhancing Film Tax Credit is a clear demonstration of how this government has supported UK Film and helped fuel growth in the creative industries to the benefit of the taxpayer.
We look forward to working with UK and global film producers and keeping the UK at the heart of international film and television production.”
The government’s film tax relief has supported almost £8 billion of production expenditure since its introduction, including films such as Oscar winning Gravity, Maleficent and HarryPotter. In the March 2015 Budget, the government announced that it would further support the film industry by increasing the rate of film tax relief to 25 per cent for all qualifying productions. Previously, the rate was 25 per cent for the first £20 million of qualifying expenditure and 20 per cent for spending above this threshold.