UK Film Tax Credits - Camera, Lights, Accounts Action…

In 2007 the government introduced film tax credits. These are designed to encourage and support the production of British films and to attract international productions to shoot in the UK. This was achieved by providing financial incentives that would make the UK an attractive location for filmmakers.

To qualify a production must pass a cultural test and meet expenditure thresholds. The cultural test evaluates a range of factors such as the film's British cultural content, the contribution of British cast and crew, and the use of British locations and sets. This test is administered by the British Film Institute.

The film must be intended for theatrical release and your production company must be primarily involved with; planning, decision-making and directly contracting for; rights, goods and services etc.

It is also, possible to qualify for a British co-production with parties located in; Australia, Canada, China, France, India, Israel, Jamaica, Morocco, New Zealand, Occupied Palestinian Territories, and South Africa. Of these, Australia, Canada, New Zealand. Israel and the Occupied Palestinian Territories also allow for television programmes.

The UK is also signed up to the European Convention on Cinematographic Co-production convention. As this is a Council of Europe, not an EU treaty this still applies post-Brexit.

The tax credits scheme operates in two main categories: Film Production Tax Credit (FPTC) and Animation Tax Credit (ATC). The FPTC offers tax relief of 25% on up to the first 80% of qualifying UK core expenditures. The Animation Tax Credit, on the other hand, provides a 25% tax relief on qualifying UK production expenditure.

The tax credits are claimed by the production company and can be used to offset against the company's corporation tax liability or if the production company is loss-making they can be claimed as a cash rebate.

The benefits of this tax relief are equally applicable to both smaller and big-budget productions.

These tax credits have proven to be a game-changer for the UK film industry. They have attracted major Hollywood productions, such as the James Bond franchise and the Harry Potter series, to shoot their films in the UK.