UK high-end TV projects to benefit from new government tax relief initiatives
The Production Guild of Great Britain (PGGB) and producers trade body Pact have both welcomed the UK government’s plans to provide more tax relief for high-end TV (HETV) and film projects.
Jeremy Hunt
In yesterday’s spring budget, chancellor Jeremy Hunt committed to providing more tax relief in HETV and film productions and introduced an extended independent tax credit for films that have budgets between £1m and £15m. He also pledged a 40% relief on gross business rates until 2034 for eligible film studios.
“We have become Europe’s largest film and TV production centre, with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here,” Hunt said.
“Studio space in the UK has doubled in the last three years and, at the current rate of expansion, next year we will be second only to Hollywood globally.”
Although today’s announcement primarily supports the film industry, producers developing HETV titles will benefit from changes to tax credits for visual effects (VFX) costs.
From April 1, the rate of tax credit will increase by 5% alongside the removal of the 80% cap for VFX costs in the audiovisual expenditure credits.
HETV shows and films currently have a headline credit rate of 34%. This equates to 25.5% in actual relief, capped at 80% of core expenditure, but with no budget limit.
The increase will bring the headline rate to 40%. The PGGB also said the new measures will provide security for the major studios in the UK, with a 40% relief on their gross business rates until 2034.
Lyndsay Duthie
Lyndsay Duthie, PGGB’s CEO, said: “The government’s acknowledgement of the success of inward investment and commitment to British film and HETV is highly encouraging.
“We remain positive that productions will return to previous high levels very soon, utilising the UK’s hugely talented workforce.”
The 40% tax credit will also be rolled out to films with budgets between £1m (US$1.27m) and £15m.
To qualify for the UK’s creative sector tax incentives, all TV shows, animation projects and films must be certified as British through the cultural test or qualify as an official coproduction.
Jay Hunt, chair of the British Film Institute, said: “The government’s new tax credit is a game-changer for UK filmmakers, creating jobs and ensuring great British stories continue to be told.
“By introducing the uplifted rate, the prime minister and the chancellor are fuelling the growth of the wider screen sector that contributes billions to the UK economy.”
Pact also welcomed the government intervention, stating that the enhanced tax credits will benefit the wider audiovisual sector.
The organisation also believes the changes in legislation will encourage more UK prodcos to film on home soil, rather than seek out aggressive tax breaks in other countries.
Pact CEO John McVay said: “The sector has reached a critical point and this intervention will provide a lifeline to indie film producers by allowing them to access funding which will attract key creative talent and in turn give them the ability to recoup their initial investment.”
