Industry bodies such as the British Film Commission (BFC), Film London and the BFI welcome the changes to the UK Film Tax Relief as announced Thursday (5 December) by the Chancellor of the Exchequer, George Osborne in the Government’s autumn statement.

The changes proposed include:

• The availability of a tax relief at 25% on the first £20m of qualifying production expenditure and 20% thereafter, for small and large budget films. This will be subject to state aid clearance. The change is meant to make the incentive easier to use and more attractive, as well as eradicate what the industry has called the ‘cliff edge’ between the 20% and 25% schemes.
   
• Reducing the minimum UK expenditure requirement from 25% to 10%. This will encourage further investment in the UK and benefit the visual effects branch specifically as well as the wider industry in general, helping British independent production companies by encouraging minority co-productions where the UK spend is less than 25%.
   
• Modernising the cultural test. The test will now allow for European as well as British culture, in line with other creative content tax reliefs currently provided in the EU. The test will become a 35 point test with a pass mark of 18 and will include an increase in the points available for principal photography/ special effects/ visual effects and English language.
   
• An investment of £5m in the National Film and Television School‘s (NFTS) Digital Village. The NFTS will be able to expand and upgrade its existing facility into a training centre and provide a sustainable supply of UK talent for the digital and creative industries  so it can compete internationally.
   

In addition the Chancellor has said he will seek state aid clearance to increase the rate of relief to 25% for all qualifying expenditure when re-notifying film tax relief in 2015.

The BFC calls the proposed changes “good news for the British film industry”, especially as it follows the successful launch earlier this year of a tax relief for both high-end television and animation.

Adrian Wootton, chief executive of the BFC  and Film London, said: “The UK is home to world-class filmmaking talent and expertise which help drive the industry forward, as demonstrated recently by the UK-produced and critically-acclaimed film Gravity.

“However, in order to continue to attract business to the UK in a fiercely competitive global marketplace, our industry must be underpinned by effective fiscal incentives. The tax relief was a game changer when introduced in 2007 and today’s announcement ensures we can continue to grow our industry, boosting the UK economy and creating British jobs; it will also encourage the production of more culturally British projects.”

BFI CEO, Amanda Nevill said: “Having just come back from China, which is one of the most exciting new markets for film in the world, it’s fantastic that the Chancellor is doing so much to ensure UK film is positioned in the strongest possible way.”

The trade organisation UK Screen, which led responses to the Government’s consultation on supporting VFX earlier this year, also welcomed the Chancellor’s announcements.

UK Screen commissioned work by Saffrey Champness, a