Department for Culture Media and Sport

tax relief

Tax relief helps to encourage home-grown UK films and film production and maintains the industry’s creative and technical skills.

Tax relief for British films

HM Treasury provides tax incentives to makers of culturally British films.

Value of UK tax relief

  • for films with a total core expenditure of £20 million or less, the film production company can claim payable cash rebate of up to 25% of UK qualifying film production expenditure
  • for films with a core expenditure of more than £20 million, the film production company can claim a payable cash rebate of up to 20% of UK qualifying film production expenditure

Accessing UK tax relief

Tax relief is available for British qualifying films.

  • films must either pass the Cultural Test (PDF 3kb) 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 25%
  • 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 incur. 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

Example of a British film claiming tax relief (PDF 26kb).  

For full details visit the HM Revenue and Customs website.

Previous film tax relief - 30 September 2007 cut-off date

30 September 2007 was the Finance Act 2006 cut-off date for acquiring a film that completed before 1 January 2007 and claiming relief on that acquisition. Acquisition expenditure incurred after that date will not count.

Production expenditure incurred after 31 December 2006 would generally not count either as that would then be an "unfinished" film and would come under the new relief.

Transitional regulations

Transitional regulations provide that films that were unfinished at 1 January 2007 and fail the new 2007 cultural test remain in the old rules (under the 2006 cultural test) and can continue to claim for production expenditure under S.42. 

For these films only, the 30 September 2007 deadline is extended to 31 March 2008. Someone acquiring such a film can claim for any acquisition expenditure incurred before 31 March 2008. This table summarises the position:

When was the film completed? When did filming start?  Does it pass the 2007  cultural test? Does it pass the April 2006 cultural test?  Relief available  Cut-off point for relief on acquisition expenditure
before 1/1/07 before 1/4/06 n/a n/a S.42 & S.48 30/09/2007
before 1/1/07 from 1/4/06 to 31/12/06 n/a yes S.42 30/09/2007
after 31/12/06 before 1/1/07 no yes S.42 31/03/2008
after 31/12/06 before 1/1/07 yes n/a new relief n/a
after 31/12/06 after 31/12/06 yes n/a new relief n/a

For further detail on these reliefs, or the previous sale and leaseback scheme please contact HM Revenue and Customs or seek specialist legal or accounting advice.

S.48 film tax relief cut-off

30 September 2007 was the cut-off date given by the Finance Act 2006 for acquiring a film that completed before 1 January 2007 and claiming relief on that acquisition. Acquisition expenditure incurred after 30 September 2007 does not qualify for tax relief.

i) Films made April to December 2006

Films made entirely between April and December 2006 that pass both the 32-point 2006 cultural test and the "maker test" - apply for certificates directly to DCMS.

ii) Films made before 2007

Films made entirely before 2007, which started filming before April 2006, that pass the old Schedule 1 (which included the 70% tests and the "maker test" and relates to S.42/48 film tax relief) - apply for certificates directly to DCMS.

Application forms and guidance notes are available on request from tim.scott@culture.gsi.gov.uk. A hardcopy form is available for all genres of films, which cannot be sent via email but can be posted to you.

S.42 film tax relief cut-off

Films that had begun principal photography but were unfinished at 1 January 2007, and that fail the 31-point cultural test of 2007, also remain in the rules for the 32-point cultural test of 2006 (without the "maker test") and can continue to claim for production expenditure under S.42 film tax relief.

For these films only, the 30 September 2007 deadline was extended to 31 March 2008. A person acquiring such a film can claim for any acquisition expenditure incurred by then. But an application for a certificate should be made in the first instance to the Certification Unit at the British Film Institute who will check the correct procedure for it.