United Kingdom 🇬🇧

The United Kingdom offers a range of tax incentives to support the film industry, attracting both domestic and international productions. Below is a detailed breakdown of the incentives:

1. UK Filming Incentives - Tax Relief and Expenditure Credits

Film Tax Relief (FTR):

The UK provides tax relief through the Film Tax Relief (FTR) scheme, offering deductions on qualifying production expenditures.

Audio-Visual Expenditure Credit (AVEC):

Introduced on 1 January 2024, AVEC replaces previous film, high-end TV, animation, and children’s TV tax reliefs.

2. Film Incentives Breakdown

Film Tax Relief (FTR):

• Relief Rate: 25% on UK qualifying expenditure.
• Expenditure Cap: Relief is capped at 80% of core expenditure.
  • Example: If 100% of the expenditure is UK-qualifying, relief is payable on up to 80%.
• Eligibility: Available for British qualifying films of any budget level.
• Closure Notice: FTR will close to all productions from 1 April 2027.
  • Productions must start principal photography by 31 March 2025 to qualify.

Audio-Visual Expenditure Credit (AVEC):

• Credit Rates:
  • 25.5% for live-action feature films.
  • 29.25% for animated feature films.
• Expenditure Cap: Relief is capped at 80% of core expenditure.

Enhanced AVEC for Lower Budget Films (Independent Film Tax Credit - IFTC):

• Credit Rate: 53% for films with core expenditure up to £15 million.
• Eligibility:
  • Films must start principal photography on or after 1 April 2024.
  • Additional budget and creative criteria apply.

3. Filming Incentives Terms and Conditions

Cultural Test:

• Productions must pass a cultural test or qualify as an official co-production to be eligible.
• The test assesses:
  • Cultural content.
  • Contribution to UK culture.
  • Location and personnel.

Minimum UK Expenditure:

• At least 10% of the production’s core expenditure must be UK expenditure.

Application Requirements:

• Obtain a British cultural certificate from the British Film Institute (BFI).
• Provide:
  • Detailed statements of core costs, split between UK and non-UK expenditures.
  • A breakdown of costs by category.

4. Governing Bodies for the Incentive

British Film Institute (BFI):

• Administers the cultural test and issues British cultural certificates.

HM Revenue and Customs (HMRC):

• Oversees the tax relief and expenditure credit schemes.

5. Filming Incentive Application Process

1. Cultural Certification:

• Apply to the BFI for a British cultural certificate by submitting the cultural test application.

2. Tax Relief Claim:

• Calculate the additional deduction and any payable credit due.
• Include the claim in the Company Tax Return.
• For accounting periods beginning on or after 1 April 2024, submit an additional information form with the claim.

3. Compliance:

• Ensure all claims are accompanied by the necessary documentation, including:
  • The cultural certificate.
  • Detailed cost statements.

For detailed guidelines and application forms, consult the official BFI and HMRC websites or contact them directly for assistance.