Budget: Additional support for the creative industry sectors
Additional support for Independent Film and visual effects expenditure along with permanent extensions for cultural tax reliefs
Additional tax reliefs
The Government announced further support for the creative industry sectors with expenditure on visual effects by film and TV production companies to attract additional tax relief under the previously announced new Audio-Visual Expenditure Credit (AVEC) regime. Independent films with a budget of less than £15 million will be able to claim a 53 percent tax credit rate under the AVEC with the introduction of the Independent Film Tax Credit, along with reduced business rates for film studios until 2034. Finally, the temporary increased rates of tax credits applicable to the Theatre, Orchestra and Museum & Gallery tax reliefs regimes will now be made permanent.
Additional tax relief for expenditure on visual effects
The Government will give additional tax relief to visual effects costs in films and high-end TV productions. Under the AVEC, visual effects costs will attract a five percent higher tax credit at a rate of 39 percent compared to other core film and TV production expenditure. The 80 percent cap on qualifying expenditure will also be removed for visual effects costs further boosting the tax benefit attributable to these costs. The changes will take effect from 1 April 2025.
A consultation will be published in due course on the types of expenditure that will be within scope of the additional tax relief.
Additional support for independent film
The Government will introduce the UK Independent Film Tax Credit (IFTC) that will allow eligible films to claim an enhanced AVEC at a rate of 53 percent on qualifying expenditure. Qualifying expenditure is capped at a maximum of a film’s total core expenditure.
The IFTC will be available for qualifying productions that have started principal photography on or after 1 April 2024. It is aimed at films that have production budgets of up to £15 million and where they receive a new accreditation from the British Film Institute.
Film studios business rates relief
Further support to the film industry was announced through a reduction in business rates. Eligible film studios in England will receive a 40 percent reduction on gross business rates bills until 2034 with the relief being implemented as soon as possible.
Permanent extension for higher rates of Theatre (TTR), Orchestra (OTR) and Museum & Gallery (MGETR) tax reliefs
From 1 April 2025, the temporary higher rates of tax credits for TTR, OTR and MGETR will be permanently set at 40 percent (for non-touring productions) and 45 percent for touring productions and all orchestra productions.
The previous announcement to close MGETR after 31 March 2026 will be reversed.
