It is difficult to miss the footage from the many awards ceremonies being held this season. Glamourous stars, risqué jokes, heartfelt speeches, outstandingly priced gift bags and acknowledgment of incredible talent. It really is the upscale way to do performance reviews.
But in among all the excitement and controversy, there is the stark fact no one can escape – making films costs money. A lot of money. HMRC have put out a Press Release to highlight the importance of their tax reliefs for film making to funding the British film industry. With particular reference to ‘1917’, after its BAFTA haul and three Oscars.
What is film tax relief?
There are eight Corporation Tax reliefs available from HMRC for work in the creative industries. Film and High end TV are two of the tax relief categories. The others are animation, video games, exhibitions in galleries or museums, orchestral concerts, children’s TV and productions in the theatre. It means that companies can reduce their Corporation Tax bill by increasing the amount of allowable expenditure.
Obviously there are criteria to be met, including a cultural test, administered by the BFI. This involves meeting a very specific definition of Britishness.
HMRC have specially trained staff to administer creative industries tax relief claims, to ensure that everyone receives their full entitlement and that no one is scamming the system.
Why does the government give tax relief to the creative industries?
In short, creative industries tax reliefs exist because companies in these fields generate so much income for the country. Research from the British Film Institute shows that for every £1 creative tax relief received from HMRC, £7 is put back into the British economy overall. It is talent and innovation that we should all be proud of. Over 5,000 creative industries tax relief claims have been granted since they started in their current form in 2007.
Financial Secretary to the Treasury, Jesse Norman, said: “Like the rest of this year’s awards season, Sunday’s Academy Awards® highlighted the amazing talent of the UK film industry. Creative sector tax reliefs have supported these internationally-acclaimed productions, and ensured that the UK remains a world leader in supporting creativity and innovation in the film industry. In 2017, our creative industries made a record contribution of more than £100 billion to the UK economy. They play a key role in ensuring that it, and the UK arts scene in general, remain dynamic, diversified and daring.”
BFI figures show that £3.6billion was spent on the production of films and high end TV in the UK in 2019. The highest ever amount.
But does tax relief really make any difference to film makers?
Let’s see what a producer of ‘1917’, Pippa Harris, has to say about their tax relief’s impact: “The UK film and high-end TV tax reliefs have been absolutely crucial [both] in terms of supporting the UK production industry… On ‘1917’ alone, we were able to give employment to over 1,200 crew and more than 1,000 cast, stunt performers and supporting artists. As well as the direct employment a major film creates, there is also a large economic benefit for the regions where shooting takes place. In the case of ‘1917’, we shot across the UK in 12 separate locations, from Glasgow down to Salisbury Plain.”
Internationally renowned creators of ‘Wallace and Gromit’ and ‘Sean the Sheep’ have also benefitted from tax relief. Finance Director of Aardman Animation Studios, Kerry Lock, said: “These reliefs are often a key part of financing, and some projects simply would not have been produced had they not been available. This helps us to continue to produce in the UK and develop and nurture talent.”
So our congratulations really do go to HMRC, for their behind-the-scenes, largely unrecognised support of Britain’s creative talent.