Spring Budget changes to the film and TV sector

As part of the 2024 Spring Budget, the government announced three new measures that taken together deliver a further £1 billion to boost the film and TV production sector in the UK.

Introduction of a new UK Independent Film Tax Credit (IFTC)

• All qualifying films with a production budget of up to £15 million will be able to opt-in to claim the enhanced Audio-Visual Expenditure Credit (AVEC), at a gross rate of 53%, netting down to 39.75% after deducting corporation tax at the main rate, on their qualifying expenditure
• In addition to all the normal qualification criteria, qualifying films will need to meet a new British Film Institute (BFI) test, with the expectation that films will need to meet at least one of the following conditions: have a UK writer, or have a UK director, or be certified as an official UK co-production
• Qualifying productions must have started principal photography on or after 1 April 2024, and only expenditure incurred on or after 1 April 2024 will be eligible for IFTC
• Claims can only be made once the legislation has been passed, which we expect will be from 1 April 2025.

More information is available on the IFTC.

Additional tax relief for visual effects expenditure

• Increase in the rate of tax relief on qualifying visual effects expenditure to 39%, resulting in a net rate after tax of 29.25%
• Removal of the AVEC’s 80% cap on qualifying costs, for UK visual effects expenditure.

These changes will take effect from 1 April 2025 and further detail will be published in the coming weeks.

Business rate relief

• A 40% relief on business rates for eligible film studios in England from 1 April 2024 until 31 March 2034
• The 40% reduction will be available for properties valued by the Valuation Office Agency (VOA) as film studios and will be applied on gross bills, ie bills paid before any relief is applied
• If a studio is also receiving Transitional Relief, the billing authority will apply a further discount on top of the Transitional Relief to bring the total bill reduction to no more than 60%
• The relief will also apply to new film studios once built, assuming they meet the eligibility criteria.

If you would like to discuss any of the points above, please get in touch with Isla MacGillivray.