The UK Government Announces Changes to Film and TV Tax Relief

On March 15 – as part of his Spring Budget speech – UK Chancellor of the Exchequer and Finance Minister, Jeremy Hunt, announced that he is introducing a new audio-visual expenditure credit with a rate of 34% for film, high-end television (HETV) and video games and 39% for animation and children’s TV.

The £1m qualifying threshold for HETV will remain. Hunt also advised that he is planning to introduce a new audio-visual expenditure credit for high-end documentaries.

For Hunt, these changes will give even more momentum to the booming UK film and TV sector, which is of critical importance to the UK economy.

It remains unclear whether the reforms will deliver a significant increase in tax relief for productions; it is expected that the new audio-visual expenditure credit may result in 25.5% of actual tax relief.

It is also important to note that the reform will change the way in which relief is calculated. The expenditure credits will be calculated directly from qualifying expenditure instead of being an adjustment to a company’s taxable profit, as under the current regime.

The government is expected to provide further detailed guidance about these changes over the summer when draft legislation will be published. Further changes to the UK’s tax relief system may still be announced once the government has worked through the responses to its recent consultation, which ended on February 9, 2023.

Companies can claim expenditure credits from accounting periods on or after January 1, 2024. From April 1, 2025, claims for new film and TV productions and games must be made under the expenditure credits system.

Hear from the experts

To learn more about these changes and how they will work in practice, join us for the upcoming Master Series, What Productions Need to Know about the UK Tax Relief, as we discuss the recently announced reforms, as well as who qualifies for the UK Tax Relief and how producers can maximize the world-class resources and support available to productions filming in the UK. Register for the Master Series here.