Film tax relief (FTR) is the foundation stone of creative sector tax relief. The scheme was remodelled in the 2006 Finance Act and by 2011-2012, film tax relief provided more than £200 million of support to around 200 films. Since its introduction in 2007, direct employment within the UK film industry has almost doubled and 1,050 film productions have made 1,900 claims, for a total of £1.1 billion of relief.
With effect from 1 April 2014, the government has enhanced the scheme so that relief is now available, for both small and large budget films, at 25% on the first £20 million of qualifying production expenditure and 20% thereafter. Previously, there was a distinction in the rates of relief available between so-called small and large budget productions. And now, furthermore, the minimum UK expenditure requirement will be reduced from 25% to 10% to encourage further investment in the UK and to benefit visual effects and the wider industry.
MMP took a full part in the government’s 2013 consultation on relief for the UK visual effects sector. Our response to the consultation, and the government’s final response, can be found here All film tax relief claims must pass a cultural test that is administered by the British Film Institute. The cultural test is also being modernised, in plans announced in Budget 2014, to put greater emphasis on the production of culturally relevant British films.
Only film production companies can apply for relief, where they are responsible for production of the film; delivery of the film; and negotiation contracts in relation to the film.
Producers can apply for interim certification at any point before or during production, or they can wait until production is completed.