Film Council Welcomes Tax Proposals

UK Film Council Welcomes New Tax Relief - Boost For British Film Industry

New tax credit will enable the UK to compete in global film market bringing jobs and investment to the UK and a consistent flow of British films to UK audiences.

The UK Film Council today applauded the Government's announcement of a new tax credit system for the British film industry which will support its development as the most important film industry in the world after the US.

In today's pre-budget report, the Chancellor of the Exchequer confirmed the new rate of tax relief for low budget films (films budgeted up to £20 million) will be a net 20%. For big budget films (£20 million and above), the rate will be a net 16%. Both rates apply to the UK spend of a film's budget.

The tax relief will provide a solid base for the production of independent British films such as Mrs Henderson Presents, Bend it like Beckham, Shaun of the Dead and Vera Drake and internationally, puts the UK in pole position for attracting big budget US studio films such as Charlie and the Chocolate Factory and Batman Begins.

John Woodward, Chief Executive Officer of the UK Film Council said:

"Today's announcement by the Chancellor is the best news the British film industry has received for five years. It marks a new era for the future growth of our industry which operates in a highly competitive global marketplace.

It's good news for the production of culturally rich British films that promote Britain around the world. It's also good news for jobs and the economy as we will be able to attract big budget films to UK shores.

The UK has one of the most highly skilled film workforces in the world and last year film production contributed £3.1 billion to UK GDP. The new tax regime will support everything from big budget films like Harry Potter, to lower budget British comedies and thrillers, as well as films from auteur directors such as Ken Loach, Michael Winterbottom and Mike Leigh.

Audiences in the UK and abroad love British films, and today's announcement will ensure that a consistent flow of British films will continue to be produced for the enjoyment of all."

This year, audiences have boosted the share of British films at the UK box office to 31%, compared to 23% last year.

The new tax relief announced today will mean:

on low budget films (with production budgets up to £20 million), the tax credit level will be 20%;

on higher budget films (with production budgets of £20 million and above), the tax credit level will be 16%; this level of tax credit applies to the total amount of UK spend -
for example, for a film with a total budget of £25 million, with a £10 million UK spend, the tax credit will only apply to the £10 million UK spend; and a more flexible system allowing producers to phase tax credits taking them either at the start of production, or later when they are receiving profits from the film.

The Department for Culture, Media and Sport also announced details of a new cultural test which will provide the gateway to accessing tax relief. The test for British films introduces a points system based on the content of the film, talent, practitioners and filmmakers to provide a clear definition of a British film.

Commenting on the new cultural test, John Woodward added:

"This test will be simple, clear and effective for filmmakers to use. It will mean that taxpayers' money will be spent on films delivering a cultural and economic benefit to the UK."