UK Film & High-End TV Tax Incentives

There are two separate UK tax incentives available for film or High-End TV projects. There is no cap on the funds available and neither scheme has a “sunset” date. The screen sector tax reliefs have been supported by both major UK political parties and the UK’s exit from the EU will not have a negative impact on the availability of these incentives.

For qualifying films or TV projects, the Film Production Company (FPC) or TV Production Company (TPC) can claim a payable cash rebate of up to 25% on UK core expenditure.

The Tax Relief is capped at 80% of the core expenditure i.e. even if you have 100% UK-qualifying expenditure, tax relief is only payable on up to 80%. This restriction stems from the overarching EU State Aid legislation. Depending on the circumstances and manner in which we leave the EU, the UK may not be directly subject to EU State Aid legislation after Brexit. However, it should not be assumed that this restriction will be automatically lifted by the UK Government as State Aid is very likely to be part of the negotiation of the UK’s future relationship with the EU.

There is no upper limit on the budget of the film/TV project or amount of relief payable within the 80% cap.

To qualify for Film or High End TV tax relief, projects must:

  • Have a minimum 10% of core expenditure spent in the UK
  • Have one FPC or TPC registered as a UK Limited Company with Companies House and set up before shooting begins
  • The FPC/TPC must be responsible for all activity from pre-production through to completion
  • Must qualify as British via the Cultural Test or be an official co-production

To access the Film Tax Relief, there must be an intention for theatrical release

To access the HETV Tax Relief for scripted televsion projects, the minimum core expenditure must be at least £1million per broadcast hour (shorter episodes can qualify if commisioned together as a series and the total spend per broadcast hour exceeds £1million)

How a project can qualify as British

A project can qualify as British by passing the cultural test, or as an official co-production.

The UK has film co-production agreements with 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 a signatory to the European Convention on Cinematographic Co-production.

The cultural test is a points-based test where the project needs 18 of a possible 35 points to pass. It comprises four sections:

Section A – Cultural content
A1Set in the UK or EEA4 Points
A2Lead characters British or EEA citizens or residents4 Points
A3Film based on British or EEA subject matter or underlying material4 points
A4Original dialogue recorded mainly in English language or UK indiginious language or EEA language6 Points

Section B – Cultural contribution
BFilm demonstrates British creativity, British heritage and/or diversity4 Points

Section C – Cultural hubs
C1(a)At least 50% of the principal photography or SFX takes place in the UK2 points
C1(b)At least 50% of the VFX takes place in the UK2 points
C1(c)An extra 2 points can be awarded if at least 80% of the principal photography or VFX or SFX takes place in the UK2 points
C2Music recording/audio post-production/picture-post production1 point

Section D – Cultural practitioners (UK or EEA citizens or residents)
D1Director1 point
D2Scriptwriter1 point
D3Producer1 point
D4Composer1 point
D5Lead actors1 point
D6Majority of the cast1 point
D7Key staff (lead cinematographer, lead production designer, lead costume esigner, lead editor, lead sound designer, lead visual effects supervisor, lead hair and makeup supervisor1 point
D8Majority of the crew1 point
Total 35 points

The cultural test is adminstered by the BFI’s Certification Unit who manage the application process as well as giving useful advise to productions on how to pass the test.

Applicants can apply for interim certification at any point before or during production. Interim certification is essential if you wish to claim tax relief during production. A final application must be submitted once the project is complete.

Futher information on film and HETV tax reliefs can be obtained from the British Film Commission

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