Making a film is an exciting but expensive venture. For many, it’s a dream come true, but financing it can be daunting. One way to ease the financial burden is through film tax credits.

If you’re unfamiliar with these, you might miss out on a valuable resource that could help turn your vision into reality.

Let’s chat about film tax credits, how they work, and how they can benefit your UK production.

What are film tax credits?

Simply put, the Government offers film tax credits to encourage film production in the UK. They help lower the cost of making a film by offering tax relief, which means you can claim back a percentage of your qualifying expenditure. This is particularly handy when you’re balancing tight budgets.

How do film tax credits work?

Film tax credits allow you to claim back a portion of your production costs against your tax bill. The key here is understanding what counts as “qualifying expenditure.” Generally, this includes costs directly related to the production, such as staff salaries, equipment hire, and location fees within the UK. You must keep detailed records of these expenses to support your claim.

Your film must pass the British Film Institute’s (BFI) Cultural Test or qualify as a co-production under one of the UK’s bilateral co-production treaties to be eligible. The BFI Cultural Test awards points based on various factors, such as the film’s setting, the nationality of the characters, and the film’s contribution to British culture.

Why should you care about film tax credits?

There are a few compelling reasons why film tax credits should be on your radar:

1. Financial savings: You can claim up to 25% of your qualifying UK expenditure. This can significantly reduce your overall costs.
2. Cashflow: Even if your film isn’t profitable, you can still claim a cash rebate. This can help with cash flow during the crucial stages of production.
3. Attracting investment: Knowing that you can recover a portion of your budget through tax credits can make your project more attractive to investors.

Real-world impact

Let’s look at some numbers to illustrate the impact of film tax credits. According to the British Film Institute, the total UK spending on film production in 2021 was £1.55 billion, with high-end TV production spending hitting £4.1bn. Of course, this was before the WGA and SAG strikes in 2023, but that’s another story, and the e availability of film tax credits is a significant factor in these figures, demonstrating how integral these incentives are to the industry.

Steps to claim film tax credits

Claiming film tax credits might sound complicated, but it’s manageable if you follow the right steps:

1. Qualify your film: Ensure your film meets the requirements by passing the Cultural Test or qualifying under a co-production treaty.
2. Keep detailed records: Keep thorough records of all qualifying expenditures, including receipts, invoices, and contracts.
3. Submit your claim: File your claim with HMRC. You’ll need to complete a Corporation Tax return and include the Film Tax Credit claim within it.
4. Await your rebate: If approved, you’ll receive your rebate once your claim is processed. This can take a few weeks, so plan accordingly.

Common misconceptions

Let’s address a few common misconceptions about film tax credits:

1. Only big-budget films benefit: This isn’t true. Productions of all sizes can benefit from tax credits. It’s not just for Hollywood blockbusters.
2. It’s too complicated to bother: While there’s some paperwork involved, the potential savings make it worth the effort. Plus, there are professionals (like us at Artisan Accounts) who can help you navigate the process.
3. You need to be a UK citizen: Not necessarily. You can claim if your production spends money in the UK, passes the Cultural Test, or qualifies as a co-production.

How Artisan Accounts can help

At Artisan Accounts, we specialise in helping film productions unlock the benefits of tax credits. We understand your unique challenges and are here to guide you through every step of the process. From ensuring your film qualifies to keeping meticulous records and submitting your claim, we’re here to make it as smooth as possible.

Don’t let the financial aspect of filmmaking overwhelm you. With the proper support and information, you can take full advantage of film tax credits and focus on what you do best – making great films.

If you’re considering a new project or are in the midst of production and need assistance with film tax credits, call us. We’re always here to help you navigate the financial side of filmmaking so you can bring your creative vision to life.

Contact Artisan Accounts today to learn more about how we can support your production.