UK Gov’t Introduces Indie Movie Tax Relief Of 40%

The UK government is to introduce an extended indie movie tax credit for films that have budgets between £1M and £15M, along with bringing in business rates relief for big studios.

From April 1, the new indie relief will be separate to the pre-existing film and high-end TV tax credit but both will fall under the new Audio-Visual Expenditure Credit system. The local industry has been calling for the move for months. Producer trade body Pact and the BFI immediately welcomed the move.

Chancellor Jeremy Hunt also announced in the past few moments that a VFX cost cap of 80% will be removed to aid with projects that benefit from the film and high-end TV tax credit.

The business rates relief of 40%, meanwhile, will help major studios such as Pinewood and Sky Studios. Sky welcomed the move and said it will help with proposals to extend the new Sky Studios Elstree and allow for the filming of NBCUniversal’s new Jurassic World movie. “Today’s announcement brings confidence to the sector, unlocking job opportunities whilst providing a stable foundation for the investments of tomorrow,” said Sky Group CEO Dana Strong.

Introduced more than a decade ago, the UK’s film and high-end TV tax credit has been hugely successful, bringing numerous shows from major streamers and studios to the nation and making it easier to get local shows off the ground.

The new indie film relief will help a sector struggling with rising costs amidst budgets for the likes of BBC Film and Film4 that have plateaued in recent years.

On the indie film relief, a Pact statement said: “Pact and the BFI have today welcomed the Government’s announcement that it will help to support the UK’s independent film sector by increasing the Film Tax Credit to 40% for films with budgets of £1m to £15m. Both Pact and the BFI believe that the enhanced film tax credit will help strengthen the indigenous film sector’s ability to attract finance and to continue developing key talent which will benefit the wider audiovisual sector.”

BFI Chair Jay Hunt added: “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.”

Hunt introduced a simplified Audio-Visual Expenditure Credit last year but this only initiated a real terms increase of around 0.5%. He then used his Autumn Statement to decline to raise relief for indie film, which Pact said was a “missed opportunity to remedy a clear market failure.” A consultation has also been launched over whether to extend tax relief to VFX.

In recent months, producers had been telling Deadline that the tax credit is making less of a difference to getting shows off the ground as costs continue to soar. The bosses of The Crown and Doctor Who indies last week told us they are forging lower-budget slates in response to the tricky market.