Calls are growing to allow lower-cost dramas – with budgets between £750,000 (US$1m) and £950,000 per broadcast hour – to qualify for the UK’s high-end TV (HETV) tax relief scheme.
Mike Benson
When broadcasters’ contributions to programming budgets are shrinking, producers are having to be ever more skilled at funding their scripted shows at lower price points.
However, this penny-pinching can often have unintended consequences. Indeed, if a savvy UK producer manages to keep their budget below the £1m (US$1.4m) per hour mark, they rule themselves out from benefiting from the country’s lauded HETV tax relief scheme.
The term ‘high-end TV’ (HETV) became widespread in the UK over a decade ago following the introduction of the game-changing tax break in 2012, available to any project with a budget of more than £1m per broadcast hour.
The Audio-Visual Expenditure Credit (AVEC) replaced the film, HETV, animation and children’s TV tax reliefs at the beginning of 2024, giving a net credit of 25.5%.
The tax credit system helped create the ‘golden age’ of UK drama financing that the industry enjoyed until a few years ago, when commissions and co-commissions from local broadcasters and US streamers drove investment in UK TV drama to record levels during the pandemic, but came crashing down once the streaming bubble burst.
The fact that one hour of scripted TV in the UK is now categorised into four budget bands (band one: up to £1.25m, band two: £1.25m – £4m, band three: £4m-£7m, band four: £7-8m+) only goes to highlight how flush the sector became.
It’s these soaring budgets that have meant many UK pubcasters can no longer afford to commission HETV shows, while indies can’t raise the finance to make them even if such projects are greenlit. Arguably, the current system has incentivised artificial budget inflation to qualify for tax relief.
Leeds-set The House Across the Street was filmed overseas
Mike Benson, creative director at UK prodco Chalkboard Productions, predicts there will be an “epidemic” of productions at a budget level that do not meet the UK HETV tax threshold in the next few years.
Benson is something of an expert in getting sub-£1m-per-hour dramas made, having “stumbled” into scripted around seven years ago after Paramount-owned UK broadcaster 5 put the call out for low-cost original drama, having decided to return to the genre after a four-year hiatus.
Since making four-part psychological thriller Cold Call for 5 using its prior experience on factual content to keep costs down, Chalkboard has made a host of relatively low-cost scripted series for not just 5 but also Channel 4 and the BBC.
However, although all these shows were set in the country’s nations and regions – places crying out for more TV production work – they’ve all been filmed abroad.
“A lot our dramas don’t meet the UK tax credit threshold,” explains Benson, speaking at last month’s Creative Cities Convention (CCC) in Bradford, where one of its recent shows for 5, The Teacher, was set. But since it wouldn’t qualify for the HETV tax credit, it was filmed in Budapest, one of numerous places in Europe that don’t have the same threshold as the UK.
“I would have loved to have made that show in Bradford. But unfortunately, the economics don’t play out. It breaks my heart that we have to go abroad,” says Benson, urging the British Film Institute to lower the tax credit threshold and do it soon.
Sarah Rose
This is because, as the UK public service broadcasters (PSBs) increasingly follow 5’s lead and commission more low-cost drama, Benson believes “hundreds of hours of programming” and “thousands of production jobs” will move abroad to places like Hungary and Ireland, where Clapperboard has made shows such as Manchester-set Desperate Measures (5), Leeds-set The House Across the Street (5) and London-set Vardy vs Rooney (C4).
“It’s going to be tens of millions of revenue. In the current situation, 90% of that revenue will go abroad. I’ve got a bee in my bonnet about the tax credit threshold because, if that was to change, I would try and set up a company in Bradford straight away,” says Benson.
Sarah Rose, president of 5 and UK regional lead at its US parent company Paramount, says the media giant would “much rather” make 5’s dramas in the UK, but as many of them fall below the threshold, it must rely on international tax credits to get them made.
“Costs are getting a bit higher. John McVay [outgoing Pact CEO) and I were talking about the tax credit position, from the one to three million band, we would say it should go lower than that,” says Rose, also speaking at CCC.
Nordic writer-producer Torfinnur Jákupsson is also among those advocating for the introduction of what he calls an ‘independent premium tier’ to support scripted drama made under the current £1m per hour threshold.
Jákupsson says while recent tweaks such as AVEC and the independent film tax credit have been welcomed by many, the current HETV model still leaves a “blind spot” for a growing segment of high-end drama that falls just below the spend threshold.
While the AVEC refined qualifying criteria and the film credit is designed to support indie cinema, Jákupsson believes his proposal complements both by applying the same logic and offering a similar solution for TV.
“High-end shouldn’t just be defined by how much money you spend,” Jákupsson adds. “It should be defined by impact, artistry and ambition.”
Jákupsson, creator of Faroe Islands-set mystery series Trom, says: “We need a system that better reflects how great TV is actually made in 2025. It is about backing those already doing more with less. High-end shouldn’t just be defined by how much money you spend. It should be defined by impact, artistry and ambition.”
Faroe Islands-set mystery series Trom
Jákupsson believes the proposal would encourage more editorial diversity and creative risk, expand regional and indie access, reward environmentally efficient production, strengthen UK drama’s global marketability, and back the kind of shows audiences are watching, without inflating budgets just to qualify as high-end.
This comes after Jákupsson launched London-based Red Herring Story, the UK affiliate of Faroe Islands-based GRÓ Studios, to develop high-end scripted and unscripted thrillers earlier this year.
Jákupsson is proposing a new dedicated support band within the HETV relief for projects with budgets between £750,000 and £950,000 per broadcast hour, providing they meet rigorous editorial, cultural and sustainability criteria. This proposal is designed to calm concerns that lowering the threshold could lead to misuse or inflate costs as streamers swoop in.
“Rather than a free-for-all, it’s a smarter framework. Tight criteria will protect the integrity and the intent. We’re just asking for smarter access. If we want culturally ambitious drama to thrive beyond the streamer system, we need a model that rewards quality and value, which doesn’t always require a higher spend,” says Jákupsson.
Torfinnur Jákupsson is advocating for an ‘independent premium tier’
As the creator of Trom – the first series made in the Faroe Islands – Jákupsson helped shape the debate that led to the Faroese industry’s current tax rebate system. “There, it was a matter of lifting the low ceiling of support. Here, it’s about making sure the floor doesn’t shut new and independent voices out,” he says.
“The current threshold for high-end drama in the UK was set over a decade ago. It blocks access for smart scripted drama that is independently produced, regionally based, and sustainably made under £1m an hour. These shows are often critically and commercially successful yet can’t qualify for support.
“Production costs are up, but many indie producers are responding not by spending more, but by working smarter. This proposal backs that shift.”
There will be some who say a sub-£1m/hour drama cannot be called ‘premium,’ but Jákupsson believes quality shouldn’t be denoted by price tag alone. “It should be about impact, reach and vision. Some of the most celebrated shows globally are made for less than the current £1m per hour threshold. A lower threshold would better reflect that creative reality,” he says.
There is also a climate angle, with Jákupsson keen to see the likes of the BFI supporting smaller scale productions. “If we want to lead in sustainable production, we can’t only support the biggest footprints. This tier would reward efficiency and conscience, not just scale.”
Jákupsson was at the inaugural SXSW London festival this month drumming up support at a time when, as niches such as vertical microdramas designed for social media are gaining traction, the embattled TV scripted industry is ripe for a re-think.
As he says: “We’re proposing an evolution of the current model to redefine and better support high-end drama that is made independently, internationally, in a smarter, more sustainable way through a fairer, future-facing support system. This is about rethinking quality, not just quantity.
