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Film tax relief supporting UK film industry


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29 October 2008

New figures showing the success of the Government’s film tax relief were published today by Financial Secretary to the Treasury Stephen Timms.  The figures, which are the first to be published since the scheme began in January 2007, show that £104 million in tax relief has been provided to support the production of around 100 new UK films.

Film tax relief is designed to promote the production of culturally British films. For a film to be eligible it must qualify as ‘British’ - either by passing the new cultural test or under an agreed co-production treaty - and incur at least 25 percent of the total production expenditure in the UK.

The figures show that 110 claims received tax relief to the end of March 2008 totalling £104 million, and covering around 100 new films. Overall 155 claims have been made over this time, for a total of £126 million, although a number of the claims are more recent and therefore still being processed.

Stephen Timms said:

“These figures reinforce the role film tax relief is playing in strengthening the British film industry and encouraging the production of high quality home-grown films. This is a dynamic industry that has continued to be resilient in the face of difficult economic times. The UK’s share of the global theatrical market was $3.3 billion in 2007, with the top 10 performing UK films worldwide grossing around $2.5 million, up 26 percent on the previous year.”

Culture Minister Barbara Follett said:
“The importance of film tax relief in supporting one of our most successful and culturally important creative industries should not be underestimated.  UK-made films provide entertainment, employment and a cultural commentary that I think is vital and the tax relief scheme is an indication of just how committed the Government is to this vibrant and diverse sector.”


  1. These provisional statistics cover the period since the introduction of the relief on 1st January 2007 and are only available for one full year (2007/08).
  2. The film tax relief is aimed directly at film production companies, based on the expenses they incur on the production of films intended for theatrical release in commercial cinemas. For a film to be eligible for relief, it must qualify as British, either by passing the new cultural test or under an agreed co-production treaty, and must incur at least 25% of the total production expenditure in the UK. 
  3. Relief can only be claimed on production expenditure incurred in the UK, up to a maximum of 80% of the total budget.  A higher rate of relief is available for limited-budget films (those with total production expenditure of £20m or less). Companies not making a profit may be able to surrender the relief for a payable tax credit worth up to 20% of the total budget for a limited-budget film and up to 16% for other films. A higher value of support may be achieved if the relief is not surrendered but used instead to reduce the company’s tax liabilities.
  4. A film production is able to make more than one claim if each claim covers a different accounting period. Out of the 125 film productions that have been used to claim relief, for example, 105 films have had just one claim submitted, while  others have had two or three.
  5. The figures are a snapshot of claims received and payments made by the end of 2007-08.  As such, there will always be some claims being processed – i.e. the claim was received by HMRC before end 2007-08 but had not been fully processed and so no payment had been made. This timing difference accounts for most of the difference between the support claimed and payments made.

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Article Published/Sorted/Amended on Scopulus 2008-11-01 12:11:55 in Tax Articles

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