Film Tax Relief  

Film Tax Relief UK is a central hub for all kinds of content production of a film maker. There’s a wealth of leading-class talent, and resources are aplenty, thanks to generous film tax credit which help filmmakers and production houses bring their projects to audiences across the nation by scoring enough points through the cultural test.

Film Tax credit in the filming industry (at a glance) works like this:

• There’s no limit to the amount of film tax credit you can claim.
• There is an 80% restriction on film tax relief of production costs.

How to know you qualify for film tax refund UK is explained as follows

FTR, or UK Film Tax Refund, is available to all British qualifying films, irrespective of their budget. As a film production company (FPC), you can claim a payable cash Film tax refund rebate of as much as 25% of your UK-qualifying film expenditure. FPC is the top company overseeing everything from the film’s principal photography to post-production and completion.

There’s no budget limit, and tax relief can be claimed on up to 80% of your qualifying expenditure, even if it is 100%.

Film tax relief UK went into effect in April 2015, allowing FPCs to claim up to 25% UK film tax credits on qualifying expenditures. This applies to any film project which qualifies as a ‘British film.’

Film Maker to qualify for film tax relief, you must:

• Have a 10% minimum core expenditure spent in the UK.
• Ensure that the intention of the film release is for the Uk.
• Have at least one FPC registered with Companies House before principal photography begins for your film.
• Understand that the FPC is responsible for all film shooting activities – from pre-production to completion.
• Check that your film qualifies as ‘British,’ enabling your producers/film production company to access film tax relief. The Cultural Test or qualify as an official co-production to qualify for UK film tax relief.

It is to note that Film Tax Relief UK  is available only to the FPC responsible for the film and on the condition that it is within the UK corporation tax net.

Film Maker, how to know what qualifies as ‘expenditure’?

Qualifying film production in the UK is defined as expenditure on filming-related activities, including pre-production, principal photography, and post-production. All of this must take place in the UK only, no matter the nationality of the individuals involved in these processes.

HMRC has defined ‘UK spend’ or ‘UK expenditure’ related to filming as a good/service which is ‘used or consumed’ solely in the UK. So, if the good/service consumptions are in the UK (e.g., in UK film theatres), then the expenditure is seen or treated as UK expenditure – subject to the rules set out in specific clauses of the Finance Bill. If the good/service consumption happens outside the UK, then this does not count as UK expenditure.

Closing thoughts on UK Film maker tax credit

Suppose you need clarification on whether you qualify for UK film tax relief or the film tax credit you can claim on your production. In that case, our friendly Tax Accountants Slough are always available to advise you.

The Cultural Test 

The test is based on points; the film or the project must score 18 out of 35 points for it to pass and be eligible for tax relief.

These points comprise four sections: A, B, C & D

• cultural test content (Are up to 18 points)
• cultural test contribution (Are up to 4 points)
• cultural test hubs (Are up to 5 points)
• cultural test practitioners (Are up to 8 points)

Cultural tests points are as allocated as follows:

Section A – cultural content

A1: Film set in the UK or Eu gets up to 4 points.

A2: If the Lead characters are British, Residents, or EEA citizens, get up to 4 points.

A3: Film based on British or EEA subject matter or underlying material gets up to 4 points.

A4: Original dialogue recorded Substantially in English or UK indigenous language, or EEA language gets up to 6 points.

Section B – cultural contribution

The film describes British innovation, legacy, and variety up to 4.

Section C – cultural hubs are split into two sections, C1 & C2

C1:

(a) The principal photography or SFX at least 50% should be taken in the UK, get up to 2

(b) The VFX of at least 50% should be taken place in the UK, get up to 2

(c) Two points can be gained if at least 80% of principal photography, VFX, or SFX takes place in the UK.

C2: Music Recording, Audio Post-production, or Picture Post-Production get up to 1.

Section D – cultural practitioners

D1: Director, get up to 1.

D2: Scriptwriter, get up to 1.

D3: Producer, get up to 1.

D4: Composer, get up to 1.

D5: Lead actors, get up to 1.

D6: Majority of the cast, get up to 1.

D7: Crucial staff (lead photographer, lead product developer, lead costume developer, lead editor, lead sound developer, lead visual goods administrator, supereminent hair and makeup administrator) get up to 1.

D8: Majority of the crew, get up to 1.

Total all sections (pass mark 18) – 35 points.

If you score the required points from A & B ie 18 points , then no further documents are needed. If not enough points scored from A & B then you will need to score more points from C & D then in this case you will need an additional report from a registered certified chartered accountant in order to qualify for the tax relief.

further topics on tax reliefs are