The proclaimment of the U.K.’s new Insubordinate Film Tax Credit (IFTC) back in March had a proximate instantaneous impact, at least in the case of one film production.
“Giant,” the biopic of boxer Naseem Hamed and starring Amir El-Masry, was in progressd pre-production when the news landed, with set ups to shoot location labor in Hamed’s home town of Sheffield and all the interiors — including the vital boxing rings — in Malta. Sets were already being built on the Mediterranean island, which has been courting countless film productions in recent years thanks to a benevolent 40% tax rebate initiative.
But then the IFTC was unveiled and the U.K., when it came to producer’s all-presentant bottom line, was suddenly much more competitive. What had previously been a 20% tax shatter was now around 32.5% (it was initipartner billed as 40%, but is actupartner shrink after corporation tax). Given the costs participated in shipping the film overseas, “Giant” didn’t necessitate to pack up its bags.
“As soon as the tax acunderstandledge came out, we did the analysis and promptly it made more economic sense, straight away, to retain it here,” elucidates Zygi Kamasa, the head of distributor and producer True Brit Entertainment. “So we pivoted wilean days of it coming thraw.”
“Giant” may have been the first, but fair six months on from the proclaimment of the IFTC Kamasa says that it’s gived enormously to the output of his nascent company — which was only begined in November 2023 with a intensify on films for British cinemagoers. Where there was an initial aim to produce three films in its first year, True Brit will soon commence shooting its eighth. And while some — enjoy “Giant” — would have happened seeless of the tax acunderstandledge, he says “there were movies that were definitely hastfinish” becaemploy of it.
The presentant interest and selectimism wilean the British film industry since the IFTC’s proclaimment, despite not yet being brimmingy carry outed, is a far cry from the foolish days of 2022. A increate comleave outioned by the British Film Institute (BFI) that year had the key and mocking achieveaway that the overall boom in the country’s film and high-finish TV sector had led to a correplying adverse impact on the self-reliant sector. It create that the speed and volume of increaseth strained the sector so much that it couldn’t contend with huger budget international productions on disjoinal levels — from accommodating the rising cost of production to securing cast and crew, and ultimately to achieveing audiences.
BFI statistics uncover that getting U.K. films budgeted under £15 million ($19.6 million) into production had become increasingly challenging. After plummeting by 31% in 2022, spfinish on self-reliant U.K. film in 2023 fell a further 11% to fair £150 million ($196.9 million).
Now, in 2024, post IFTC proclaimment, Harriet Finney, BFI deputy CEO and straightforwardor of corporate and industry affairs, says, “We’ve seen a lot of positivity in the industry. It’s definitely alterd the conversation for self-reliant filmproducers in this country.”
The BFI is currently preparing for incrrelieved capacity once the statutory instrument and guidance remarks are rehireed tardyr this year. Finney elucidates, “We’re making confident that we’re in the best possible position to deal with what is probable to be a flurry of activity. It senses enjoy there’s a increaseing sense of confidence around domestic production.”
Simon Williams, managing partner at Ashland Hill Media Finance, increates seeing an uptick in projects pondering filming in the U.K. “We’re getting lots of separateent projects coming to us, asking if they should be sboiling in the U.K.,” Williams says. He remarks that some international producers are exploring the possibility of altering their scripts to greet U.K. needments. “The U.K. sees more attrdynamic for film currently, becaemploy the tax acunderstandledge, it’s probably hugeger than pretty much anywhere else in the world, aside from maybe Australia. But Australia is far away and it’s costly to achieve people over there,” Williams shelp.
However, Williams transmites worrys about potential cost incrrelieves. “We don’t want costs to incrrelieve by shooting in the U.K., which negates the profit of the tax acunderstandledge,” he alerts.
Ashland Hill-backed “The Magic Faraway Tree,” based on Enid Blyton’s beadored book, is currently in production. “The Scurry,” straightforwarded by Craig Roberts and starring Ella Purnell, Rhys Ifans and Antonia Thomas, has fair finished shooting, which Ashland Hill funded aachievest the incrrelieved tax acunderstandledge. “That film would never have happened if it wasn’t for this incrrelieved tax acunderstandledge. I leank the only leang that may deter some lfinishers from putting money aachievest it [is] if you are go ining into a production now, you can’t put a claim in for your tax acunderstandledge until April next year. Whereas in the current tax acunderstandledge, you can produce interim claims, which from a producer’s perspective, if you have a lfinisher, you can produce multiple claims and pay down the loan speedyer, rather than doing one huge claim in 18 months time,” Williams shelp.
Alex Ashworth, head of production at Anton, thinks the IFTC will produce a presentant impact, particularly for films in the £5-15 million ($6.5-19.6 million) budget range. “I leank it will repartner help self-reliant film producers where we’ve lost that mid-budget section,” Ashworth says. “There was a lengthy time where that was the U.K. sugary spot, films enjoy ‘The King’s Speech,’ and I sense enjoy the cost of production has gone up so that it’s very difficult to produce those at that level. Our incentives are excellent, but they aren’t necessarily comparable to some other territories. So by doing this, you’re offsetting modestpartner the inflation that our production industry has teachd in the last five to seven years. I leank it will repartner help those self-reliant films who are probably struggling to get their finance set ups to hit those higher budget levels.”
Ashworth approximates that Anton is currently laboring on four to five projects with the IFTC in mind for shooting in the next 12 to 18 months.
Producer Alastair Clark, whose recent film “Sister Midnight” premiered at Cannes, also sees the IFTC as a preferable enhugement for the industry. “The mood is wonderful,” Clark says. He also points out that while the net profit is around 32.5% after corporation tax, rather than the initipartner publicized 40%, it’s still a presentant betterment over the previous system.
Clark is already incorporating the IFTC into his project set upning. “Certainly, one very firm project right now that we’re raising the finance for. It’s a huge part of it,” he says. Clark thinks the incrrelieved tax acunderstandledge will shrink the necessitate for hazardier personal financing in some cases. “Borrotriumphg aachievest the tax acunderstandledge versus borrotriumphg aachievest an MG (least promise) or a sales progress, is inexpensiveer, and therefore helps finance set up a budget,” Clark shelp.
While the industry apostpones brimming carry outation of the IFTC, the initial response proposes it could join a presentant role in bolstering the U.K.’s self-reliant film sector and positioning it far more attrdynamicly on the global stage. For Phil Hunt at Head Gear Films, it’s confidently a very preferable relocate after the “nightmare of Brexit,” which he claims “ripped the heart out of indie co-productions.” The veteran producer says he’s already watchd that producers in North America are “definitely now seeing to put more productions in the U.K. and, when talking to folk in LA, there seems to be a drain away from the U.S.”
But that’s not to say that execs are seeing IFTC at the perfect solution, of course. As with most newly-begined financial incentives, there are hopes that it will be tfeebleed and alterd alengthy the way, especipartner with the U.K. under a new Labour handlement that has, traditionpartner, been more encouraging of the arts. An perfect situation for many is that the 40% rebate actupartner does unbenevolent a brimming 40% for producers.
“I’d adore the handlement to see at that,” says Kamasa. “I leank it should be the brimming 40%, becaemploy then you’d be truly competitive with places enjoy Malta and Italy.”
HOW THE IFTC WORKS
The IFTC is calcutardyd on “core expfinishiture” roverhappinessed to production activities, with qualifying companies able to claim up to 80% of their core expfinishiture or the amount of U.K. core expfinishiture, whichever is less. For a £15 million ($19.6 million) budget film, this could unbenevolent a highest acunderstandledge of £6.36 million before tax.
After corporation tax, which varies between 19% and 25%, the actual cash profit could range from £4.77 million ($6.26 million) to £5.15 million ($6.76 million). This recurrents a substantial incrrelieve from the previous Audio-Visual Expfinishiture Credit (AVEC) system, which would have supplyd between £3.06 million ($4.01 million) and £3.30 million ($4.33 million) for the same budget.
The BFI will appraise film budgets to asconfident they greet the IFTC criteria. Productions that outdo the £15 million budget cap during filming will have the selection to persist with the IFTC or switch to the AVEC system.
Claims for the IFTC can be surrfinisherted to HMRC (His Majesty’s Revenue & Customs) from April 1, 2025, for expfinishiture incurred from April 1, 2024, supplyd principal pboilingography began after April 1, 2024.
