Credits will be claimable from 1 April 2025 for costs incurred since 1 January 2025, with costs associated with Generative AI also included

Confirmation in yesterday’s Budget (30 October) of the tax credit rise on UK VFX spend to 29% was welcomed by British Film Commission chair Adrian Wootton.

The proposals had first been raised in the March Budget this year, that from 1 April 2025, VFX costs in the UK will attract an increase in the rate of relief to 39% (29.25% after tax).

This represents an increase from the previous rate of 25.5% net – and will be exempt from the overall Audio-Visual Expenditure Credit’s 80% cap on qualifying expenditure. Credits will be claimable from 1 April 2025 for costs incurred since 1 January 2025, with costs associated with Generative AI also included.

Wootton said: “UK film and TV is globally admired, and a key sector driving economic growth. Our VFX sector is one of the jewels in the UK industry’s crown, with a depth of creative and technical expertise.

“But these are competitive times. Productions are looking globally for the best talent and incentives to guide their investment decisions. Any new measures must address intensifying global competition and help us put our best foot forward.

“Today’s confirmation of the VFX tax credit increase doubles down on UK strengths and will drive up investment. It is not only welcome, but essential to support our sector and wider UK growth.”

On the AI inclusion he added: “We’re delighted that HM Treasury has listened to industry feedback on Generative AI, and included these costs in the overall VFX tax credit enhancement. The BFC pressed for this in our consultation response and we believe this will play an important part in keeping our VFX sector future-proofed and globally competitive.”