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UK Production Incentives All Producers Should Know About

Don't miss out on the UK's tax incentives, special programs, and national and regional funding opportunities for films, HETV, and more!
November 17, 2022

Joseph Chianese

Next time you’re considering an international film destination, take a closer look at the UK – a film-friendly nation that comprises England, Scotland, Wales, and Northern Ireland. The UK has a lot to offer producers – with generous tax incentives, stable funding opportunities, an ever-growing production infrastructure, and diverse filming locations.

In 2021 in the UK, producers spent a record-breaking £5.6b ($7.7b) on film and big-budget HETV productions – a 23% increase from 2019. Of that spend, more than £4.7b (84%) can be attributed to inward investments from major international productions.

With money coming in, more talent is also migrating to the area, simplifying the process of staffing key crew positions. Productions also have access to all-inclusive facilities that feature flexible studio space, standing sets, on-site costume, prop shops, and more. And the UK isn’t the only one investing! US-based Blackhall Studios is building £150 million, state-of-the-art Shinfield Studios in Reading, England.

It’s clear that the UK is devoted to supporting a production's physical needs – but the deal gets even sweeter when it comes to financing.

Lucrative UK funding opportunities

There are many unique programs that can be used to secure funding for film, animation, TV projects, and even gaming. Having access to government-backed funding options is especially beneficial today, as production companies continue to combat increased costs related to inflation and COVID compliance.

Four key types of financing are available: Tax Relief, UK Global Screen Fund Grants, National Funds, and Regional Funds. Here’s how they work:

1. Tax Relief

The UK has a reliable, transparent, stable tax credit program called Tax Relief for Films, Animation, High-End & Children’s Television programming, and Video Games. The Tax Relief available for films and high-end television (HETV) programming is highlighted below.

  • For all British qualifying films & HETV of any budget level, the UK production company can claim a payable cash rebate of up to 25% on UK qualifying expenditures
  • Tax relief is capped at 80% of the core expenditures (meaning, even if you have 100% UK-qualifying expenditures, tax relief is only payable on up to 80%)
  • There is no limit on the budget of the project or the amount of relief payable within the 80% cap

UK qualifying production expenditure is defined as expenditures ‘used or consumed’ in the UK. This includes costs incurred by the production company on filming activities – pre-production, principal photography, visual effects, and postproduction – that take place within the UK, irrespective of the nationality of the persons carrying out the activity.

A project must meet specific eligibility criteria (e.g., Film: 10% of the project's core expenditures must be UK expenditures, HETV: £1M per broadcast hour,) and must pass the British Cultural Test or be part of an approved co-production treaty to qualify as 'British.'

Points can be earned for:

  • Cultural Content: Films set in the UK or European Economic Area (EEA), British or EEA lead characters, British or EEA subject matter, and English, EEA, or UK indigenous language original dialogue (max of 18 points).
  • Cultural Contribution: Films that demonstrate British creativity, heritage, or diversity (max of 4 points).
  • Cultural Hubs: Film locations (e.g., if at least 50% of principal photography, SFX, or VFX takes place in the UK. Bonus points if 80% or more takes place in the UK). Points are also earned for music recording and audio and picture post that takes place in the UK (max of 5 points).
  • Cultural Practitioners: Individual project contributors from the UK or EEA, including the director, scriptwriter, producer, composer, lead actors, and key staff. If a majority of the cast or crew is native to the UK or EEA, the production earns a point (max of 8 points).

Productions can earn a maximum of 35 points and must reach a threshold of 18 points to pass the test.

Please note: on November 17th the UK Treasury Department announced plans for industry consultation on reforms for the UK Tax Relief, with the intention to simplify and modernize the tax reliefs, boost growth, and make sure the tax reliefs remain sustainable. Proposed changes include:

  • Merging of the film, animation, high-end TV, and children’s TV tax reliefs into a single tax credit.
  • Modernizing the HETV tax relief: The proposals include increasing the minimum £1M threshold (to more accurately reflect current production costs,) and changes to the 30-minimum requirement (to curb the incidents of the grouping together of multiple shorter episodes to qualify for the relief.) Defining documentaries in legislation for HETV has also been proposed; “documentary” is currently not defined, which has led to boundary pushing: the government has seen an increasing number of HETV tax relief applications from programs that are borderline reality television.
  • Removing the 80% cap on qualifying expenditures.

UK Treasury is asking for feedback until February 9, 2023 from individuals, companies, representative and professional bodies, accountants, tax advisors and lawyers, with the reforms to be implemented in Spring 2024.

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2. The UK Global Screen Fund

Eligible productions can apply for grants via the UK Global Screen Fund (UKGSF), a program overseen by the British Film Institute. Financed by the Department for Digital, Culture, Media, and Sport, the UKGSF aims to boost international development and distribution opportunities for film, TV, animation, documentary, and video games from the UK's independent screen sector. After a successful £7M pilot year, the program was extended for three years and received an additional £21 million in funding.  

The UKGSF offers funding in four key areas:

  • International Distribution: Supports UK sales agents to increase their international promotion and sales of live action and animated, fiction and documentary UK feature film projects, and provides the following:
    • Funding relating to the international sale, marketing, and promotion of a single eligible UK film in the form of non-recoupable grants
    • Up to £25,000 for a single eligible film

      The film must:
      • Be budgeted at less than £10 million
      • Be a new feature length (minimum 60 minutes running time) live action, animation, fiction, or documentary film
      • Be either complete, in production, or in post-production
      • Have been completed within the 12 months prior to the application date, or will be completed within 12 months of the application date
      • Qualify or be wholly capable of qualifying for certification as a British film
      • Not be fully financed by a studio or mini major
      • Not be intended for a TV or SVOD premiere
  • International Business Development: Supports UK screen content businesses across film, TV, animation, and interactive narrative video games to enhance their international activities. Eligible companies can apply for funding using one of two tracks:
    • Film transformation track: Funding for internationally focused transformational business strategies related to independent UK film. Strategies must start in early 2023 and span three to five years.
    • General track: Funding for business strategies to create, acquire and/or exploit intellectual property (IP), covering all eligible screen sectors, for increased international revenue, audiences, and profile. Strategies must start in early 2023 and span three years.

      Eligible companies can apply for funding between £50K and £200K in total over the three-year period, with support in the form of non-repayable grants (applicable to both the film transformation track and the general track).
  • International Co-production: Supports UK producers to work as partners on international co-productions and help create new global projects. Eligible companies can apply for funding of up to £300K towards:
    • ‘Minority’ feature film co-productions (co-productions where the contribution of at least one of the other co-producing partners is greater than the overall contribution of the UK producer) in any language or genre, including fiction, animation, and documentary, which are co-produced with international partners
    • Television co-productions (whether ‘minority’ or ‘majority’ in nature) in the animation and documentary genres only, in any language, which are co-produced with international partners

      Support will be in the form of non-recoupable grants.
  • Prints and Advertising (P&A): Support for UK producers to reach international audiences:
    • Funding towards certain eligible P&A costs for the release of a single UK film across a grouping of at least four international territories
    • Up to £100K in total, in the form of non-recoupable grants, across an eligible territory grouping
    • Within the £100K, up to £30K for a single territory as part of the eligible territory grouping

More detail on eligible costs, activities and other guidelines can be found at the BFI website. You can also visit the UKGSF website for complete eligibility criteria and application details.

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3. UK National Funds

London is often top of mind when producers think about filming in the UK, but choosing to film in other areas can open up access to more incentives. In fact, the UK has an entire incentive program, called "Made Outside London," or MOL, that encourages production outside of the capital to boost local economies.

Recent big-name films to utilize MOL tax incentives include Warner Bros’ The Batman, filmed in Liverpool, and Wonder Woman 1984, filmed in Wales. 

So, what kind of incentives can you find outside of London? Scotland's Production Growth Fund typically awards between £200K and £500K to each qualified project. And eligible productions can receive funding packages up to £400K from the Welsh government agency Creative Wales.

In addition, Northern Ireland Screen offers funding towards the production of feature films, TV drama, animation, factual and entertainment television, and interactive content, in the form of a recoupable loan with profit participation, or in limited circumstances a grant. The fund is intended to assist in completing budgets on productions which are almost fully financed – a production must have at least 65% of its funding already in place to be considered.

Designed for productions which contribute to building a sustainable screen industry in Northern Ireland, eligible projects must be commercially viable and able to demonstrate a direct economic benefit to the region. In the case of feature films, the attachment of an experienced sales agent would be an asset, as would UK or US domestic distribution. For television, an expression of interest from an international distributor or network broadcaster is preferable.

Northern Ireland also offers cultural funds, and programs to support film education, digital film archive, and skills and training.

4. UK Regional Funds

These funds give productions that film in a particular city or metro area an extra financial boost. Each regional fund is designed to attract productions – and the jobs that come along with them – fueling economic growth across the UK.

Regional funds include:

  • Yorkshire Content Fund: A public-private investment that provides up to £500K in funding to TV, film, video games, and digital projects.
  • Liverpool City Region Production Fund: Open to local and national companies, this fund invests up to 20% of the production budget with a £500K project cap.
  • West Midlands Production Fund: Supports projects in Shropshire, Staffordshire, Warwickshire, Worcestershire, Herefordshire, Stoke-on-Trent, Telford and Wrekin, Birmingham, Coventry, Solihull, Wolverhampton, Dudley, Sandwell, and Walsall. The fund invests up to £500K in eligible projects - including higher-end feature film and TV drama productions and projects at an advanced stage of secured financing with a director, lead producer, and established industry partners attached.

Regional funds are available in addition to tax relief programs, national funds, and Global Screen Fund grants.

How to optimize UK production benefits and funding incentives

Figuring out the best location, incentives, credits, and grants can be overwhelming, but you don't have to do it alone. If you decide to explore the UK as a filming destination, give EP's tax incentive team a call. Our experts know production incentives and funding options inside and out. We'll help you to optimize your budget by securing the most lucrative financing opportunities for your next UK-based project. As a starting point, check out our incentives calculator to learn what funding opportunities and tax benefits are available to you.

To learn more about the UK's generous film incentives, talent pool, infrasctructore, and more, watch the Master Series webinar Behind the Boom: Why the UK is a Hotspot for Production.

Once you've decided on a location, EP's Production Portal – the workforce management platform for compliant UK production – will help you to streamline and simplify your reporting. Track regionality across your productions to instantly see how much you're spending on crew and use that data to support your tax reporting! And rest assured, EP will help you through the entire process – from greenlight to wrap.

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