No extension to Film and TV Tax Credits in the Budget

Whilst the Chancellor didn't announce any extensions or improvements to creative tax credits, she has promised to continue with lower rates for studios.

Leading up to last week’s budget, various discussions with industry bodies, unions and leaders in the media industry revolved around improvements to the Film and TV tax credits regime. Such was the ‘noise’ that most thought, me included, that there would be additional breaks. Whilst the good news as the British Film Commission rightly said was that the current regime stays intact, the speculated rumour that there could be a new credit to help with distribution and marketing costs for independent films was not included in the budget. It was believed that the Culture, Media and Sport Committee had submitted plans for the tax credit to be extended to print and advertising costs. I would love to know how this was talked through at the Treasury.

Industry professionals have also been asking for improvements to the High-End TV tax credit. This pays out 34% of 80% of Total Core Expenditure, after deducing UK Corporation Tax of 25%. This equates to a cash rebate of 25.5%, which expressed as a percentage of core expenditure is 20.4%. Shows costing more than £1million per hour are eligible for this rebate. This is fine for the streamers whose productions tend to run far above this threshold but for more modest budgets, there is not a similar regime to the Independent Film Tax Credit which since its introduction has been a huge success. Producers of TV shows have been agitating for the threshold to be reduced to around £500,000 to £750,000 per hour perhaps with similar caveats to the Independent Film Tax Credit.

Some good news from the budget was the promise of continued lower rates relief for studios. There was a time a year or so when studios were screaming about the high business rates which they felt were nullifying the tax credits available.

Overall, the UK Film and High-End TV tax credit regime is regarded as attractive to both UK and International producers, but regions overseas are introducing increased incentives to attract production. For most productions part of finalising the budget and accessing investment is reviewing where it is cost effective to make the film.

The UK authorities need to keep aware of what is happening globally and not let the significant uplift in UK production slide: serious consideration must be paid to the calls of the industry, they do know what they are talking about.

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