Christopher Nolan, Barbara Broccoli, Idris Elba, Tilda Swinton and over 100 industry leaders welcome the increased tax credit for independent British films announced today in the Spring Budget.

The BFI, filmmakers and industry leaders have today unanimously welcomed the introduction of a 53% spending credit (equivalent to around 40% tax relief) for UK film productions with budgets of up to £15m.

The intervention was announced today in the Government's Spring Budget to support this vital but severely challenged part of the UK film industry. This follows work by the BFI and the industry and Pact's proposal to model how tax relief could be made more effective and is supported by filmmakers including Christopher Nolan, Emma Thomas, Idris Elba, Tilda Swinton, Edgar Wright, Mike Leigh, Andrew Haigh, Tim Bevan, Eric Fellner, Barbara Broccoli, David Heyman, Kenneth Branagh, Daniel Kaluuya, Danny Boyle, Riz Ahmed, Gurinder Chadha, Sam Mendes, Steve McQueen, Elizabeth Karlsen, Alex Garland, Alfonso Cuaron, Andrea Arnold, Asif Kapadia, Emerald Fennell, Gareth Edwards, Joanna Hogg, Joe Cornish, Nida Manzoor, Paul Greengrass, Paul King, Andrew 'Rapman' Onwubolu, Richard Curtis, Ridley Scott, Steven Knight and David Puttnam.

"The Government's new tax relief is a game changer for British filmmakers, creating jobs and ensuring great British stories continue to be told," said Jay Hunt, BFI Chairman. "By introducing the increased rate, the Prime Minister and Chancellor are fuelling the growth of the wider education sector, which contributes billions to the UK economy."

Ben Roberts, Chief Executive of the BFI, says: "This is a dramatic moment for British film and the most significant policy intervention since the 1990s. The positive impact will be felt across the industry and through all the new films that audiences will enjoy. The films we produce are vital to our cultural expression and creativity - reflecting a diverse and global Britain and nurturing careers - and we thank the Government, the DCMS, the industry and our friends at Pact for working together to deliver this historic initiative."

This increase in the spending credit applies to UK films with a budget of up to £15 million (with either a UK writer, UK director or certified as an official UK co-production) and marks a transformative moment for the sector, as producers and filmmakers have increasingly struggled to get films of this scale financed and into production in the UK. Films that meet the criteria will be able to claim an enhanced Audio Visual Expenditure Credit (AVEC) of 53% (up from 34%) from 1 April 2024. This recognises the vital role that making these films plays across the film ecosystem - from taking creative risks and telling stories that reflect the diversity of the UK, to developing talent working both in front of and behind the camera. (The AVEC replaces the previous film tax credit, which provided 25% of qualifying UK expenditure on up to 80% of a film's total production budget. The AVEC of 53% equates to a relief rate of approximately 40% under the film tax credit).

BFI statistics show that foreign investment in film and high-end television productions in the UK has grown significantly in recent years, accounting for £78% of the total £4.23bn spent on making new productions in the UK last year. However, it is becoming increasingly difficult to get UK films into production with a budget under £15m. In 2023, spending on making UK domestic films fell to £150m, just over £11% of the total £1.36bn spent on making new films in the UK; this decline followed an even sharper fall in spending the previous year of £31%. In a highly competitive global market for film production, with countries around the world offering increased tax benefits, UK films will have to consider going abroad if they are to be made. As a result, this would limit opportunities in the UK for crews, production services and locations at a time when the sector is seeing significant investment in state-of-the-art production facilities.

The complexity of the challenges facing the sector was explored through research and evidence published by the BFI, including an Economic Assessment of UK Independent Film (2022). The review recommended an increase in film tax relief specifically for independent film in the UK, which would have a significant positive impact and far-reaching positive impact on the sector as a whole. This report also builds on the BFI's Commission on UK Independent Film, published in 2018, which highlighted profound changes in the industry that are having a greater impact on UK independent film.

Following recommendations in an economic review by the UK Independent Film Producers Organisation, Pact has undertaken detailed modelling on how the film tax credit could be made even more effective for films with production budgets of up to £15 million. Pact worked closely with the BFI and the UK Government on the modelling. The modelling concluded that an AVEC (Audio-Visual Expenditure Credit) of £53% (approximately £40% under the film tax credit) would bring significant benefits to the UK independent film sector.

"I am delighted that the Government has recognised the important role that the UK independent film sector plays in developing key talent and securing jobs across the economy," says John McVay OBE, CEO of Pact. "The sector has reached a critical point and this intervention will provide a lifeline to indie film producers by enabling them to access funding that will attract key creative talent, while giving them the opportunity to recoup their initial investment."

The package of measures announced today as part of the Government's Budget also includes 40% gross business tax relief for qualifying film studios in England until 203; funding for an expansion of the UK's leading National Film and Television School; and a 5% increase in tax relief for UK visual effects costs in films and high quality television, under the Audio-Visual Expenditure Credit (AVEC). UK visual effects costs will be exempt from the 80% cap on qualifying expenditure under the AVEC.

Producers and filmmakers, who have created some of the most popular films with audiences and showcased British film talent and creativity, have unanimously welcomed the new level of tax relief for independent British films.

Comments from the industry and filmmakers and further information can be found here:

Press release (in English) BFI, 06.03.2024

Image: Raine Allen-Miller in production on Rye Lane (2023)