UK film tax credits and relief explained

UK film tax credits can be complicated, but they’re worth investigating and having a think about if you need to find extra funding for your production. That’s because this government incentive allows production companies involved in pre and post-production activities, photography, and delivering the film to claim film tax relief – and that can go a long way in getting your film over the finishing line.

If you already know about film tax credits, then click below to get your advance now. Otherwise, read on to see how UK film tax relief can relieve the financial burden of your production and whether you’re eligible.

CTC-light bkg-svg
“The process with Adsum was really quick and straightforward. We requested a quote on Tuesday and the advance was in our account by the end of Thursday meaning we could pay our costs and continue with our next series of films. Who knows how long it would have taken if we waited for HMRC!”

What is film tax relief and how do you become eligible?

Film tax relief is a type of tax credit set up by the government to boost the UK creative industry. It’s designed to help film production companies reduce the amount of tax they have to pay or claim a payable tax credit.

However, there are a few (or a lot) of things your production company or film must do to qualify for film tax relief.

1. Your film must be:

  • Certified as British by the British Film Institute
  • Intended for theatrical release
  • Have at least 10% of its core costs – such as pre- and post-production and photography – relate to activities in the UK

2. The company claiming the UK film tax credits must be responsible for:

  • Pre- and post-production
  • Principal photography
  • Delivering the completed film

3. Your production company must also:

  • Be primarily involved in planning and decision-making
  • Directly negotiate, contract and pay for rights, goods and services

If your film and production company meets all the above criteria, then start your film tax relief claim with Adsum today.

How much is Film Tax Relief worth?

UK film tax credits work by lowering the amount of corporation tax you must pay or, if your film makes a loss, by awarding you a tax credit worth up to 25%.

If you make a profit, the amount of tax you pay amounts to whichever is the lower of the following:

  • 80% of total core expenditure
  • The core expenditure total for goods or services provided from the UK and EEA

This can be complicated to navigate. Fortunately, we can help you figure out exactly what you need to do.

How do you get certified as British using the BFI cultural test for films?

In order for your film to qualify for UK film tax credits, it needs to be certified as British by the BFI. This is done using the cultural test for film.

This is a points-based test with a total of 35 available. You need 18 to gain certification. The points are broken down and awarded as follows:

Cultural content: 18 points
Up to 4 points are available for films set in the UK or a European Economic Area (EEA), up to 4 for lead British of EEA characters, up to 4 for British or EEA subject matter, and up to 6 points for dialogue recorded mainly in English or UK indigenous or EEA languages.

Cultural contribution: 4 points
A total of 4 points are available for elements of the film that show British heritage, creativity, and diversity.

Cultural hubs: 7 points
Up to 7 points are available for cultural hubs, broken down as follows:
• Up to 2 points are available if at least 50% of the principal photography or SFX takes place in the UK
• Up to 2 points are available if at least 50% of the VFX takes place in the UK
• An extra 2 points can be awarded if at least 80% of principal photography or VFX or SFX takes place in the UK
• A further 1 point can be awarded for music recording, audio post production, and picture post production facilities from the UK or EEA

Cultural practitioners: 8 points
A total of 8 points are available for using personnel who are UK or EEA citizens and residents. For each of the following, 1 point will be awarded:
• Director
• Scriptwriter
• Producer
• Composer
• Lead actors
• Majority of cast
• Key staff, such as the lead cinematographer, costume designer, editor, hair and make-up designer etc
• Majority of crew

Are all films eligible for tax relief?

No, not at all. To be eligible, your film must adhere to the below criteria. If it doesn’t, don’t worry, as we can help you figure out what you might need to do to qualify.
To qualify to film tax credits, the film must be:

  • Intended to be shown to the general public at a commercial cinema
  • Certified as British
  • Have at least 10% of its core expenditure come from UK or EEA services.