Your guide to production in England
Insider knowledge, essential details, and first-hand tips on filming in England.
England uses the UK Film Tax Relief, which is outlined on the British Film Commission website as the following:
Value of UK Film Tax Relief
- For films of all budget levels, the Film Production Company (FPC) can claim a payable cash rebate of up to 25% of UK qualifying film production expenditure.
- For films with a core expenditure of more than £20m, which completed principal photography before 1 April 2015, the FPC can claim a payable cash rebate of up to 25% on the first £20m of qualifying UK expenditure, with the remaining qualifying UK expenditure receiving a 20% tax rebate.
Accessing UK Film Tax Relief
- Tax relief is available for British qualifying films. Films must either pass the Cultural Test or qualify as an official co-production
- Films must be intended for theatrical release
- Films, including those made under official co-production treaties, must reach a minimum UK spend requirement of 10%
- Tax relief is available on qualifying UK production expenditure on the lower of either
- 80% of total core expenditure; or
- the actual UK core expenditure incurred
- There is no cap on the amount which can be claimed
- The FPC responsible for the film needs to be within the UK corporation tax net
Minimum UK spend requirement
A minimum of 10% of costs must be spent on UK qualifying production expenditure.
UK qualifying production expenditure is defined as expenditure incurred on filming activities (pre-production, principal photography and post production) which take place within the UK, irrespective of the nationality of the persons carrying out the activity.
HM Revenue & Customs’ (HMRC) definition of UK spend introduces the concept of where a good or service is “used or consumed” in the UK. If they are used or consumed in the UK, the expenditure is treated as UK expenditure (under the rules set out in the clauses of the Finance Bill). If they are used or consumed outside the UK, they do not count as UK expenditure.
Further details on the definition of “used or consumed” are available in HMRC’s guidance on Film Tax Relief.
Film Production Rebate
A rebate (or grant) is funds paid to the production company based on the amount of qualifying expenditures, or jobs created in the state or country by the project. The production company does not need to file a tax return for rebates.
Film Refundable Tax Credits
A refundable tax credit is similar in function to a rebate, however, the production company must file a tax return to claim it, and receive a credit for taxes owed. Tax credits can sometimes be used as collateral to obtain a loan so that the production company receives an advance, which is usually discounted.
Film Transferable Tax Credits
A transferable tax credit may be sold or assigned to a local taxpayer. Some states offer transferable tax credits, which allow production companies to sell or get a refund for tax credits that they are not able to use. Many times brokers are used to perform these transactions.
Film Non-Refundable, Non-Transferable Tax Credits
This type of tax credit can be used to offset a production company’s current tax liability, and can be carried forward for a set time, but not transferred to third parties.
The information stated herein is for reference only and based on a source using data as of January 2015. Make sure you consult a qualified tax adviser and professional who is familiar with tax incentive programs to determine the best fit for your project.