The British government took another step to lure filmmakers across the Atlantic when the Chancellor of the Exchequer, George Osborne confirmed in his Budget speech that the government had approved enhancements to the package of changes to the Film Tax Relief set out at Autumn Statement 2013. The following changes will take effect from 1 April:
- Film Tax Relief will be available at 25% on the first £20 million of qualifying production expenditure and 20% thereafter, for small and large budget films. This will make the Film Tax Relief easier to use and more attractive, as well as eradicate the ‘cliff edge’ between the 20% and 25% schemes
- The minimum UK expenditure requirement will be reduced from 25% to 10% to encourage further investment in the UK and benefit visual effects and wider industry, helping UK independent production companies by encouraging minority co-productions where the UK spend is less than 25%.
- The cultural test will be modernised. It will be expanded to allow for European as well as British Culture, in line with other creative content tax reliefs. The test will also include an increase in the points available for principal photography/ special effects/ visual effects and English language.
The incentives have made the United Kingdom a leading destination for big budget features, including the upcoming Star Wars: Episode VII for Lucasfilm, Marvel's The Avengers: Age of Ultron, and the 7 time Oscar-winning Gravity for Warner Bros, for which PFW was the exclusive conversion partner.
Further information about the Film Tax Relief can be found on the HMRC website.