The UK government has launched the Independent Film Tax Credit (IFTC), aimed at supporting low-budget films.
- Applications for the IFTC will open on October 30, following the finalisation of statutory requirements.
- Eligible productions are those with a budget up to £15m, offering significant financial benefits.
- Films must meet the BFI’s cultural test and involve UK creative input to qualify.
- The policy was long-delayed but is now in place just before parliamentary dissolution.
The UK Government has officially approved the Independent Film Tax Credit (IFTC), a development expected to invigorate the low-budget film sector. This decision was announced by Chancellor Rachel Reeves and Culture Secretary Lisa Nandy, underscoring the governmental commitment to the creative industries. Set to coincide with the BFI London Film Festival, this policy marks a significant endorsement for independent filmmakers in the UK.
Commencing October 30, the BFI certification unit plans to start receiving applications for the IFTC, following the formalisation of statutory instruments. This new financial incentive is aimed at productions that began principal photography on or after April 1, 2024. The BFI, anticipating increased demand, has expanded its team by hiring five additional staff to manage the applications efficiently.
The IFTC, termed the ‘enhanced audiovisual expenditure credit for low-budget films,’ specifically targets productions with a total budget not exceeding £15 million. These films will benefit from an enhanced credit of 53%, translating to an actual relief of about 40%, on up to 80% of their qualifying expenditures. This move is designed to make independent film production more financially viable and competitive.
To qualify for this credit, productions must satisfy the BFI’s existing cultural test. This involves having a UK writer or director or obtaining certification as a UK co-production. Additionally, films with budgets up to £23.5 million can partially qualify, though their claim is capped at 80% of £15 million of UK qualifying spend. The government has delineated £23.5 million as a threshold beyond which it is more advantageous for productions to utilise the standard AVEC rates.
Previously announced under a Conservative government and included in the Finance Act of May, the IFTC faced delays due to an unexpected general election in July. However, the current Labour government has expedited its implementation, effectively concluding years of advocacy by key industry bodies such as the BFI and Pact, which argued for measures addressing rising production costs and fierce competition from international streaming giants.
In conclusion, the Independent Film Tax Credit represents a pivotal step in supporting the UK’s independent film sector, bolstering its competitive edge.
