film tax relief blog


Film Tax Relief

Films. They’re part of our consciousness.  Whether you’re into rom-com, sci-fi or Indie.  They speak to us and live with us.  The one that changed the way we looked at life after we saw it.  The one that we couldn’t sleep with the lights off after we saw it.  The one that messed us up for love for years after we saw it….but I digress!

We have a proud history of film in the UK.  The first moving picture was shot in Leeds in 1888.  Two of the highest grossing film franchises in history are British; Harry Potter and 007.   In the last 10 to 15 years, Britain has become home to the leading visual effects houses in the world, thanks to persistent investment in R&D.   It’s a tradition we should all be proud of and the UK government knows how valuable it is as one of the fastest growing industries in the country and in maintaining our profile as a cultural beacon throughout the world.  That’s why they want British filmmakers to thrive.  And to help you, they have created the Film Tax Relief based on a cultural test.

How Does It Work?

If your production company passes the Film Tax Relief cultural test, you could gain tax rebate on as much as 80% of your budget up to £20 million.  That’s a lot of tax relief!  It can make the difference between seeing your film on the big screen or just in your head.

“Film Tax Relief is not just about paying less tax on your profits, it’s getting cash back before your masterpiece even hits the cinemas.”


Take our client, Paula.  Paula had worked in the film industry for ages, but she was finally working with her production partners on a film of their own development.  Obviously, we suggested Film Tax Relief as a way to help her realise her dream.

Paula was a little bit reticent at first.  There has been some controversy in recent years about bogus companies set up to claim tax relief for wealthy investors, for films that were never in production.  But for genuine production companies, Film Tax Relief can be a lifeline.

And Film Tax Relief is only available to film production companies. It refunds up to 25% of ‘core’ production expenditure.  Core expenditure covers pre-production, principal photography and post-production spend but not development, distribution and other non-production activities.

Paula was convinced and with our guidance, she carefully went through the Film Tax Relief cultural test with her partners to ensure that they passed: the story, the key people, the locations where they were hoping to film and the companies where the VFX work would take place were among the factors taken into account.  Oh, and the film has to be intended for theatrical release.

There are strict rules for Film Tax Relief and it was hard to keep track of the requirements at first, but after a few meetings going over the criteria, Paula and her team had a handle on it and to be on the safe side, she decided to put a matrix on the wall of the production office and update the scores when things changed.   Most importantly, Paula and her team were able to reduce the amount of funding they needed to film.  And their dreams are starting to come true…filming just started recently.  Here’s hoping for fresh red tomatoes.


In a nutshell…

If your production company is working on a film that passes the Film Tax Relief cultural test, it could qualify for up to 80% tax relief on core expenditure.  You have to be able to prove it though, so you need to keep strong admin records of what stage of production costs apply to and show proof of expenditure in the UK, and that applies to your partners as well.


To find out more about this and other tax breaks for creative companies, get my free eBook here, Thinking Outside the Lab, Studio Or Whatever Box You’re In.

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