The 40% reduction in business rates bills will be awarded by local authorities

Film studios are set to receive business rates relief from today, 17 February, as the government implements a 40% reduction in business rates bills.

Local authorities can begin establishing local schemes and awarding the tax relief from now on; the Film Studio Business Rates Relief will be available for eligible studios in England until 2034 and, where applicable, will be backdated to 1 April 2024. Film studios will not need to apply for the relief, as local authorities will award it to eligible properties. If in doubt, film studios should contact their local authority.

Chancellor of the Exchequer, Rachel Reeves, said: “The UK leads the world in creating great film and TV and we should all be immensely proud of the impact we’ve had across the globe.

“From the Avengers to Indiana Jones, the UK has drawn in some of cinema’s biggest names thanks to a combination of fantastic local talent and a world-leading creative sector as well as attractive tax incentives.

“As part of the Plan for Change, we will continue to build the sector into a global beacon of home grown success, creating more jobs, more investment, and putting more money into working people’s pockets.

This comes on top of a package of wider previous announcements for the creative industries announced on 17 January that included investments for start-up video game studios, grassroots music venues and creative businesses.

The relief will maintain the UK’s status as a world leader in the creative industries and will help deliver the Plan for Change by going further and faster to kickstart economic growth so working people have more money in their pockets.”

The creative industries sector employs 2.4 million people and is worth £124.6 billion to the UK economy. Last year, there was a total of £5.6 billion of production spend in the UK.

The UK has a long-established tax-relief programme: The Audio-Visual Expenditure Credit (AVEC) gives companies a tax credit worth 34% of their UK production costs on a film or high-end TV programme, or 39% of their production costs on an animation or children’s TV programme.

Also, from 1 April 2025, film and HETV companies may claim a credit of 39% on their UK visual effects costs, and eligible films with budgets of under £15 million will be able to claim an enhanced 53% rate (The Independent Film Tax Credit).  

Industry welcomes relief

Culture secretary Lisa Nandy said: “The UK’s film industry is truly world class, producing global box office hits like Wicked and indie classics like Aftersun.

“The sector has huge potential for further economic growth and the government is ambitious for its future. Our new tax incentive, as well as other new measures like indie film tax reliefs and £25 million funding for a new film studio in Sunderland, will help ensure we can continue to create British content, international blockbusters and high quality jobs.”

Chief executive of the British Film Commission Adrian Wootton added: “The British film and TV industry is a creative and economic powerhouse, and our film studios are a vital contributor to this success. Today’s confirmation of the Business Rates Relief for Film Studios in England is testament to Government’s recognition of this fact.

“The BFC is pleased that Government listened to the sector’s concerns and we are proud to have supported the development of this landmark intervention. We will continue to work with Government and stakeholders to secure the best possible long term solution for all parties.”

Harriet Finney, deputy CEO and director of corporate & industry affairs, BFI said: “2024 saw a massive £5.6 billion of production spend in the UK, further confirming that our film and TV industries continue to be a powerful and vital growth industry.

“Our state-of-the-art studio spaces are central to that growth, so we welcome today’s announcement and the Government’s recognition of their crucial role in ensuring we can continue to make world-renowned UK film and TV and attract outstanding international productions, driving investment and creating jobs across the UK.

*The relief will be available on properties valued by the Valuation Office Agency (VOA) as film studios.

*The 40% reduction is inclusive of Transitional Relief. The value of any Transitional Relief a studio receives will be deducted from the value of the film studio relief. This means that eligible film studios’ final bills will be no more than 60% of their gross bill. Studios will remain eligible for Improvement Relief in addition to this relief, which will mean that no ratepayer will face higher business rates bills for 12 months as a result of qualifying improvements to a property they occupy.