UK Screen welcomes changes to UK film tax relief

UK Screen welcomes changes to UK film tax relief
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In the Autumn Statement the Chancellor announced a number of changes to the UK’s film tax relief.

UK Screen Association welcomed the Chancellor’s announcements. Working with partners across the industry, including the British Film Commission, UK Screen commissioned work by Saffrey Champness to help develop a series of recommendations to government. These recommendations, which are reflected in the announcement, ensure that these new measures support the whole film industry, complementing the Government’s existing support for digital content production and for skills and training in the digital content sectors.

These improvements to the film tax credit build on a cohesive package of support for the creative industries which includes the new tax reliefs for high-end television, animation and games, funding for research and development for digital content production (via the Technology Strategy Board) and the increased funding for investment in skills announced in the Spring 2013 Budget.

The proposed changes in detail are to make relief available at 25% on the first £20 million of qualifying production expenditure and 20% thereafter, for small and large budget films, subject to state aid clearance. This will make the Film Tax Relief easier to use and more attractive, as well as eradicate the ‘cliff edge’ between the 20% and 25% schemes. The minimum UK expenditure requirement is to be reduced from 25% to 10% to encourage further investment in the UK, helping UK independent production companies by encouraging minority co-productions where the UK spend is less than 25%. The cultural test is to be modernised – which will be expanded to allow for European as well as British Culture, in line with other creative content tax reliefs. The test will become a 35-point test with a pass mark of 18.

In addition the Chancellor will seek state aid clearance to increase the rate of relief to 25% for all qualifying expenditure when re-notifying film tax relief in 2015.

The tax changes announced will be introduced from April 2014, subject to state aid approval, and legislated at Finance Bill 2014.

www.ukscreenassociation.co.uk

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