Tax relief and certification
How can films qualify for tax relief in the UK?
- Tax relief is available for British qualifying films. Films must either pass the Cultural Test or qualify as an official co-production.
- Films must be intended for theatrical release.
- Films, including those made under official co-production treaties, must reach a minimum UK spend requirement of 25%.
- Tax relief is available on qualifying UK production expenditure up to a maximum of 80% of total qualifying costs. There is no cap on the amount which can be claimed.
- The film production company (FPC) responsible for the film needs to be within the UK corporation tax net.
What do I need to do to qualify my film as British?
Films can qualify as British in one of three ways. They must meet the requirements of one of the following:
- One of the UK’s official bilateral co-production treaties; or
- The European Convention on Cinematographic Co-production; or
- The Cultural Test.
Who is tax relief available to?
- UK film tax relief is available to Film Production Companies (FPC).
- The FPC is defined as the company responsible for the principal photography and post production of the film and for the completion of the finished film. (There is no requirement for the film rights to be owned by the FPC at the time the film is completed).
- The FPC must be within the UK corporation tax net.
How much tax relief is available?
- For films that cost up to £20 million, the Film Production Company (FPC) can claim an enhanced deduction of 100% with a payable cash element of 25% of UK qualifying film production expenditure.
- For films that cost over £20 million, the FPC can claim an enhanced deduction of 80% with a payable cash element of 20% of UK qualifying film production expenditure.
- Tax relief is available on qualifying UK production expenditure up to a maximum of 80% of total qualifying costs.
What is the minimum UK spend requirement?
A minimum of 25% of costs must be spent on UK qualifying production expenditure. UK qualifying production expenditure is expenditure incurred on filming activities (pre-production, principal photography and post production) which take place within the UK, irrespective of the nationality of the persons carrying out the activity.
This definition depends on where goods or servicesare “used or consumed”. If they are used or consumed in the UK, the expenditure is treated as UK expenditure. If they are used or consumed outside the UK, they do not count as UK expenditure.
Only expenditure incurred by the film production company is eligible for Film Tax Relief.
Further details on the definition of “used and consumed” are available in HMRC’s guidance on Film Tax Relief.
Who is the tax relief paid to?
This is paid to the Film Production Company who was responsible for the film, all costs should go through this FPC and it should be set up prior to principal photography.
What are your criteria for film classification?
Please contact the British Board of Film Certification with enquiries relating to classification and censorship.