The Chancellor has announced a raft of tax relief changes for Britain’s creative industries sector during his Spring Budget 2024 announcement on Wednesday.
Jeremy Hunt revealed a package that will provide over £1bn in additional tax relief over the next five
years.
According to Hunt, film and TV studio space in the UK has doubled in the last three years and, at the current rate of expansion, will be second only to Hollywood globally next year.
Now, eligible production studios in England will receive a 40 per cent relief on their gross business rates until 2034.
Dana Strong, chief of Sky Group, said: “We’re delighted that the Chancellor called ‘Cut’ today on TV and Film studio business rates, providing vital tax relief to enable the UK’s world-class film and TV production sector to continue to thrive.
“Today’s announcement brings confidence to the sector, unlocking job opportunities whilst providing a stable foundation for the investments of tomorrow in the UK, such as our proposal for Sky Studios Elstree North and the filming of NBCUniversal’s Jurassic 4.”
Hunt also confirmed an increase in rate of tax credit by five per cent and removed the 80 per cent cap for visual effects costs. In the autumn statement last year, he committed to providing more tax relief for visual effects for film and high end TV.
Caroline Norbury OBE, chief executive of Creative UK, said scrapping the 80 per cent cap “will make a real difference when it comes to incentivising UK production.”
And Norbury is “delighted” to see the government introduce a new tax credit at a rate of 53 per cent for UK independent films with a budget of less than £15m.
Commenting on this particular announcement, Professor Mattias Frey, a film and media industries professor at City, University of London, said the plans to spur on lower budget domestic films “has the potential to be a shot in the arm after a year affected by the Hollywood writers’ and directors’ strikes.”
Additionally, some £26m in funding will go to the National Theatre to enable it to upgrade its stages.
“Today I particularly want to recognise the contribution of our creative industries and the tourism that comes from orchestra, museums, galleries and theatres,” added Hunt.
During the Covid-19 pandemic, the government temporarily upped headline rates of theatre tax relief to 45 per cent and 50 per cent levels of tax relief, which were due to end in March 2025. Hunt described them as a “lifeline” for performing arts across the country.
“Today in recognition of their vital importance to our national life I can announce I am making those tax reliefs permanent,” he said, revealing a 45 per cent relief for touring and 40 per cent relief for non touring productions.
In the Spring Budget announcement today, Hunt also cut National Insurance from 10 per cent down to eight per cent.
Creative UK chief Norbury added that this cut is “welcome for creative freelancers”, especially as the cost of living squeeze continues.
In June 2023, the government published a sector vision setting out ambitions to grow the creative industries sector by £50bn in gross value added.