New figures published today by HMRC reveal that the number of claims for Film Tax Relief (FTR) reached a record high in 2016-17 as the film industry stepped up its activity in the UK.
Film tax relief allows qualifying companies to make a deduction in their taxable profits, and those which don’t make a profit can surrender the tax relief for a payable tax credit.
In order to qualify, films must either pass a cultural test or be a qualifying co-production. At least 10 per cent of the total production costs must relate to activities in the UK.
Since FTR was introduced in 2007, £2.3bn has been paid out to meet FTR claims, of which over £1.6bn were claims paid to large-budget films and over £630m to limited-budget films. In total there were 175 films completed in the UK in 2016-17 which claimed FTR.
Today’s figures also included details of tax reliefs claimed by other creative industry sectors including high-end television (HETV), animation and video games. Details on the claims for children’s television and theatre tax relief were also included for the first time.
Since 2015, 30 programmes have claimed children’s television tax relief resulting in payouts of £5m. In 2016-17, £46m of theatre tax relief was paid out relating to 1,570 productions of which 490 were touring and 1,080 were non-touring.
‘The UK already has a thriving creative industry sector and it’s clear that these tax reliefs are proving ever more popular. We’ve recently seen a number of Hollywood blockbusters being filmed in UK studios, which suggests that an increasing number of film-makers are recognising the attractiveness of the UK as a place to make films.
‘However, in times of public spending pressure, these tax reliefs can always be under review. It is to be hoped that the Government recognises the value of these reliefs, and the economic benefits that they bring.’