Film Tax Relief for Corporation Tax

Film tax relief is available in the UK for a film production company, provided the company is responsible for pre-production, principal photography, post-production, and the delivery of the completed film. To qualify, the following conditions must be met:

• The film is certified as British by the British Film Institute (BFI).

• It is intended for theatrical release.

• At least 10% of the core costs are incurred in the UK.

  
  

To qualify for tax relief, the film must be certified as British and pass a cultural test. Alternatively, for international films, the production must qualify as British through an internationally agreed co-production treaty. Certification is managed by the British Film Institute (“BFI”) on behalf of the Department for Culture, Media and Sport. The BFI issues two types of certificates: an interim certificate for unfinished films, and a final certificate once the production is completed.

Claimable Amount

The company can claim an additional deduction to either reduce its profits or increase its losses. The additional deduction is the lower of:

• 80% of the total core cost, or

• The amount of UK core costs.

  
  

If the company is making a loss, it may be able to surrender all or part of that loss for a payable credit, at a rate of 25%.

Claim Period and Procedure

Claims can be made up to one year after the company’s filing date. However, for accounting periods beginning on or after 1 April 2024, claims for Film Tax Relief can be made up to two years after the end of the relevant accounting period.

Claims are submitted through the company’s tax return and should include the additional deduction or payable credit amount. Starting 1 April 2024, all claims must also include an additional information form, which provides necessary evidence to support the claim. This includes:

• A British Cultural Certificate (if an interim certificate is provided, the final certificate must be submitted once the film is complete),

• A breakdown of core costs (split between UK and non-UK costs),

• A detailed breakdown of costs by category.

  
  

Recent Changes

Film tax relief is scheduled to close on 1 April 2027. However, companies may still be able to benefit from the Audio Visual Expenditure Credit Scheme. Film Tax Relief will no longer be available if production does not begin by 31 March 2025, but, as mentioned, the Audio Visual Expenditure Credit may still be claimed.

Speak to an Expert

HMRC offers several reliefs to companies in the creative industry. If you are unsure whether you qualify for any of these reliefs, don’t hesitate to reach out to us. We would be happy to assist you.

Authored by: London Tax Team