British Producers Can Breathe Easy as Government Protects Tax Breaks for Film and TV

British film and TV producers can breathe a sigh of relief after months of uncertainty around the country’s tax relief scheme for production.

As part of the U.K.’s spring budget, Chancellor of the Exchequer Jeremy Hunt revealed on Wednesday that he’s raising tax credits and keeping the qualifying threshold in place. This is a welcome move for the TV production community, in particular, which has for years taken advantage of a lucrative scheme in which scripted TV shows with a minimum spend of £1 million ($1.2 million) per broadcast hour are able to claim payable cash rebates of up to 25% on qualifying U.K. spend.

The tax breaks have helped to elevate the U.K. into a major hub for international productions, yet the scheme has been under review since the fall, causing some anxiety in the production community.

Hunt confirmed on Wednesday, however, that both film and high-end TV will be eligible for a credit rate of 34% and that the qualifying threshold for high-end TV will remain at £1 million. Full details of the updates will be published this summer, while the changes are expected to go into effect from January 2024.

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Notably, the government is also reducing the the minimum slot length required for a high-end TV production to be eligible for the Audio-Visual Expenditure Credit from 30 minutes to 20 minutes. The new legislation will apply to every individual episode, and will take effect from Jan. 1, 2024.

Elsewhere, animation and children’s TV will be eligible for a rate of 39% — which is even higher than the one in place for film and high-end TV — while a new Video Games Expenditure Credit will have a credit rate of 34%.

As part of the budget, the film, TV and video games tax reliefs will be reformed from April 1, 2024, becoming expenditure credits instead of additional deductions. “The new Audio-Visual Expenditure Credit will replace the current film, high-end TV, animation and children’s TV tax reliefs,” reads a line from the budget.

As part of this change, expenditure credits will be calculated directly from qualifying expenditure instead of being an adjustment to the company’s taxable profit.

Outlines the budget: “The expenditure credits will be available for companies to claim in respect of accounting periods ending on or after 1 January 2024. Productions that have claimed relief under the current system will be able to opt into the new regime.”

Meanwhile, the current tax reliefs will close to new productions from April 1, 2025. Films and TV shows that haven’t finished principal photography — and video games that haven’t wrapped development — by April 1, 2025, can continue to claim relief under the current regime until March 31, 2027.

The U.K. industry has hailed the reliefs.

Ben Roberts, chief executive of the British Film Institute, said: “The news today will ensure the U.K. remains a truly globally competitive production hub, giving us economic recovery and growth, creating thousands of jobs for people up and down the country and enabling creative talent and storytelling to thrive.

“It’s good news that the high-end TV threshold has been preserved. I am particularly heartened to see a much needed boost for children’s television and animation as two areas of cultural and societal importance in which the U.K. excels creatively, but that still have significant growth potential.”

U.K. creative Industries minister Julia Lopez added: “I am delighted that we have been able to increase our support for the film, TV and video games industries, which have been one of the major success stories of the U.K. economy in recent years. These tax reliefs help to create jobs right across the country, drive economic growth and allow the U.K. to showcase its culture to the world.”

Adrian Wootton, chief executive of the British Film Commission, said: “The U.K.’s tax reliefs have directly influenced many productions’ decisions to base themselves in the U.K., contributing billions of pounds to the economy and hundreds of thousands of jobs across the U.K.’s nations and regions. With increasingly intense international competition, we’re delighted to welcome this package of measures, future-proofing the U.K.’s film, high-end TV and animation tax credits and our position as a leading global production hub.”

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Larita Shotwell

Update: 2024-07-21

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