Budget 2015: Film tax relief

Companies that are involved in the production of films are able to claim Film Tax Relief (‘FTR’) for qualifying core expenditure. This provides an enhanced relief for film production expenditure.

FTR currently applies at a rate of 25% for the first £20 million of qualifying core expenditure, and 20% to amounts thereafter, for all eligible film productions. FTR can be claimed on eligible UK production expenditure, up to a maximum of 80% of the total film budget.

For a film to be eligible for relief, it must be certified as British by passing a cultural test administered by the Department for Culture, Media and Sport or by qualifying as an official co-production with another jurisdiction. In addition, a minimum of 25% of its budget must be spent on UK qualifying production expenditure.

The rate of FTR will increase to 25% for all qualifying core expenditure, for all eligible film productions.

This change will take effect from the later of 1 April 2015 and the date of state aid approval.

The single rate of FTR will remove the distinction between limited budget films and all others.