Film Tax Relief

Overview

Any film production company currently making a film may be eligible to claim Film Tax Relief (FTR). If your business operates in this field, it may be worth looking into.

For the relief to be claimed, the film being made must satisfy the following criteria:

  • The film must be intended for theatrical release
  • The film must qualify as a British Film (meaning it must pass the Cultural Test for film, or qualify under the European Convention or a bi-lateral Treaty)
  • 10% or more of total core expenditure must have been incurred in the UK

It is worth noting that FTR is only available to companies and therefore excludes individuals, partnerships or investors.

Qualifying costs

The relief is only available on qualifying expenditure, which is known as the “core expenditure” incurred in making the film.

Core expenditure is defined as film-making expenditure incurred from the start of development up until the final delivery of the film. It specifically excludes costs incurred on development, distribution and other non-production activities.

Any speculative costs incurred are also specifically excluded (i.e. costs incurred before it was determined that the film would go ahead).

Rate of relief and calculation

The amount of film tax relief available to film production companies is based on the qualifying expenditure which is the lower of:

  • 80% of total core expenditure, or
  • the actual UK core expenditure.

The actual FTR claim is made through corporation tax self-assessment, and the amount of FTR repayable as a tax credit is 25% of the lower of:

  • The company’s available loss for the accounting period
  • The qualifying expenditure for the accounting period

If you would like to know more about film tax relief or require assistance in this area, please feel free to get in contact with us.

 

Blog written by Hannah Black

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