The British Film Institute (BFI) and the film industry are celebrating a significant move by the UK government to support the country’s film productions. The introduction of a 53% expenditure credit, equivalent to a tax relief of approximately 40%, for UK film productions with a budget up to £15 million has been overwhelmingly welcomed by filmmakers and industry leaders. This landmark decision comes in response to the challenges faced by the UK’s film industry and aims to ensure that British stories continue to be told and that the sector continues to contribute billions to the UK economy.
The Importance of the Expenditure Credit
The new expenditure credit has been hailed as a game changer for UK filmmakers. By introducing the uplifted rate, the government is fueling the growth of the wider screen sector, creating jobs, and ensuring that British stories are given the opportunity to shine. Ben Roberts, BFI Chief Executive, describes this move as the most significant policy intervention since the 1990s and believes that its positive impact will be felt across the industry and in the new films that audiences will get to enjoy.
The Transformation of the Film Sector
This increase in the expenditure credit is particularly transformative for UK films with budgets up to £15 million. Producers and filmmakers have been facing increasing challenges in financing films at this level and getting them into production in the UK. The availability of this credit recognizes the crucial role that these films play in the overall ecosystem of the film industry, from creative risk-taking to showcasing the diversity of the UK and developing talent both in front of and behind the camera.
Boosting UK Films in a Global Market
The UK film industry has seen significant growth in overseas investment in recent years. However, getting UK films with budgets under £15 million into production has become increasingly challenging. In 2023, the spend on making UK domestic films dropped to just over 11% of the total spent on making new films in the UK. This decline followed an even sharper decrease in the previous year. With countries worldwide offering increased tax incentives for film production, UK films have had to consider going overseas to secure funding, limiting opportunities for UK crews, production services, and locations.
The Challenges Faced by the Film Sector
The challenges facing the UK film sector have been thoroughly investigated through BFI-published research and evidence. Reports such as “An Economic Review of UK Independent Film” (2022) have highlighted the need for increased film tax relief, specifically for independent films, to have a significant positive impact on the sector. The BFI’s Commission on UK Independent Film, published in 2018, also emphasized the seismic shifts occurring in the industry, which were affecting UK independent films more acutely.
Modeling a More Effective Tax Relief
Following the recommendations in the Economic Review of UK Independent Film, producer organization Pact worked closely with the BFI and the UK government to develop a model for enhancing the film tax relief for films with production budgets up to £15 million. The modeling concluded that an Audio-Visual Expenditure Credit (AVEC) at 53% (approximately 40% under the Film Tax Relief) would deliver significant benefits to the UK independent film sector.
Industry and Filmmaker Reactions
The announcement of the increased expenditure credit for UK films has been met with universal acclaim from industry leaders and filmmakers. Renowned filmmakers such as Christopher Nolan, Emma Thomas, Idris Elba, Tilda Swinton, Edgar Wright, and Mike Leigh have all expressed their support and appreciation for this new level of tax relief for independent UK films.
A Boost for Independent Filmmaking
Independent and lower-budget filmmaking is the birthplace of new voices and innovations that are vital to the entire industry. The enhanced tax relief provides opportunities for British crews, filmmakers, and cast members for years to come. Barbara Broccoli, producer of the Bond films, recognizes the importance of this support for independent filmmaking and believes that it will ensure the continued thriving of the screen industry and the discovery of new talent both on and off the screen.
Supporting Cultural Expression and Creativity
Films made in the UK are not only vital to the country’s cultural expression but also contribute to its economic success. The new tax credit recognizes the value of British independent films in showcasing the complexity, humanity, and humor of British lives and characters. It provides the necessary support to continue producing creatively driven UK films that connect with audiences and showcase crucial parts of British culture.
The Impact on Employment and Investment
The introduction of this enhanced tax relief is expected to have a significant impact on employment and investment in the film industry. It will attract outside investment and create more career opportunities across the sector. The relief will also provide a lifeline to indie film producers, allowing them to access funding that will enable them to attract key creative talent and recoup their initial investment.
Additional Measures for the Film Industry
In addition to the increased expenditure credit, the UK government has announced a package of measures to support the film industry. This includes a 40% relief on gross business rates bills for eligible film studios in England until 203, funding for an extension at the National Film and Television School, and a 5% increase in tax relief for UK visual effects costs in film and high-end TV under the Audio-Visual Expenditure Credit (AVEC). The exemption of UK visual effects costs from the AVEC’s cap on qualifying expenditure will further support the growth and development of the visual effects industry in the UK.
The introduction of an enhanced expenditure credit for UK films with budgets up to £15 million is a landmark move that has been warmly welcomed by the British Film Institute, filmmakers, and industry leaders. This tax relief is set to transform the UK film sector, providing crucial support to independent filmmakers, creating jobs, and ensuring that British stories continue to be told. With the additional measures announced by the UK government, including relief on business rates for film studios and increased tax relief for visual effects costs, the film industry is poised for continued growth, attracting investment, and showcasing the creativity and talent of British filmmakers.
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