A sigh of relief for the UK film industry?

George OsborneAmong yesterday's (19 March) budget announcements from the Chancellor of the Exchequer was the confirmation that enhancements to the UK's film tax relief have received State Aid Approval.

The changes include:

  • Film tax relief being available at 25% on the first £20m of qualifying production expenditure and 20% thereafter, for small and large budget films
  • Minimum required UK expenditure to be lowered from 25% to 10%
  • The modernisation and expansion of the cultural test to allow for European as well as British culture, reflecting other creative content tax reliefs

The changes will take effect from 1 April, and have been welcomed by the British Film Commission (BFC), whose chairman Iain Smith said: "The British film industry continues to demonstrate its value both in terms of job creation, international investment and creative and technical expertise, as demonstrated by British successes as this year's Academy Awards and BAFTAs. We are delighted by this further recognition of the value of the creative industries to the British Government."

Adrian Wootton, chief executive of the BFC and Film London, added: "The BFC co-ordinated an industry response to the Government consultation on the enhancements to the tax relief so we are thrilled that they will be implemented from 1 April. These changes will make the UK's world-class production industries even more attractive and accessible to international and British filmmakers and further build on and expand the UK's business prospects.

"Importantly it will allow the UK's world-class VFX and post production sectors to remain competitive and the BFC will be hosting a group of senior US executives next month to capitalise on the new opportunities. It's also important to note the hugely positive impact of the tax relief changes on the UK's international co-production prospects, opening up opportunities with a wide range of international territories."

The news follows on from David Cameron's recent endorsement for the UK film industry and tax credits.