The British government has provided a boost for the UK film and TV industry by announcing that it is increasing tax breaks and maintaining the qualifying threshold.
Jeremy Hunt, the British Chancellor of the Exchequer, said he would reform the film and TV relief from a rebate of 25% to a new “expenditure credit” of 34% from January 2024. The change represents a 0.5% real-terms increase in the tax break.
He added that the qualifying threshold for high-end TV shows would be held at £1M ($1.2M). Ministers looked at raising the threshold, to the dismay of producers who said it would discourage investment.
Announcing the measure in his Budget, Hunt told the House of Commons: “Our film and TV industry has become Europe’s largest with our creative industries growing at twice the rate of the economy.”
In addition to the changes to the film and TV tax relief, Hunt said the animation and children’s TV sector will receive a 39% expenditure credit.
The tax reliefs have been renamed the Audio-Visual Expenditure Credit and the government will publish draft legislation for the reforms on July 20. Ministers published a 25-page document featuring more detail, including:
- The minimum episode length of a TV show that can qualify for tax relief has been reduced from 30 minutes to 20 minutes
- The government will maintain the 80% cap on qualifying expenditure
- All tax credit claims will now need to be submitted online
The tax credit overhaul follows a consultation, during which ministers received 63 responses from interested parties.
“The overwhelming majority of respondents to the consultation emphasised the success of the current creative tax reliefs and their importance to the audio-visual sectors,” the government said.
Former Chancellor George Osborne first introduced wide-ranging tax breaks in 2013 and they have played a big role in helping the UK’s film and TV business boom in recent years.
Production spend in the UK high-end film and TV industries reached a record £6.3BN ($7.6BN) in 2022, according to the BFI. This was up £1.8BN on the figure recorded in the pre-pandemic 2019 and is £600M more than last year’s previous record of $5.6BN.
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