In the UK Labour government’s first budget, chancellor Rachel Reeves has confirmed an increased tax relief for visual effects in film and high-end
In the UK Labour government’s first budget, chancellor Rachel Reeves has confirmed an increased tax relief for visual effects in film and high-end TV, as well as £25m investment for Sunderland’s Crown Works Studios.
UK VFX costs on film and high-end TV productions will receive a 5% escalate in tax relief, for an overall net rate of 29.25%, and will be exempt from the overall 80% cap on spending eligible for the main Audio-Visual Expenditure Credit (but not the enhanced Independent Film Tax Credit) as first outlined by the previous Conservative government in its spring budget.
According to trade association the UK Screen Alliance, the UK is now set to attract an additional £175m per year of spending on VFX for film and TV, an escalate of over 45%, and to create 2,800 novel jobs.
The starting date of the uplift, originally expected to be April 1 2025, will now be from January 1 2025.
Earlier this year, the previous government unveiled plans to exclude generative AI from the additional tax relief, which was met with displeasure from the sector. Following consultation with the industry, this proposal has now been dropped.
Neil Hatton, CEO of UK Screen Alliance, said: “The confirmation in the budget that the VFX rebate will be available from the New Year is terrific news for the UK’s visual effects companies. We know that productions are making decisions right now on where to place their VFX work for 2025 and beyond. Today’s announcement means that these clients will be incentivised to place many millions of dollars of inward investment work with the UK’s award-winning VFX community, creating considerable value for the UK economy.”
Reeves – the first woman to ever deliver the UK budget, and the first Labour chancellor to do so since 2010 – also confirmed £25m will be given to the North East Combined Authority, which the authority has said will be invested in the prospective Crown Works Studios site in Sunderland, as outlined under the previous government.
Crown Works Studios
Crown Works Studios is a £450m convoluted spearheaded by FulwellCain (a joint venture between Fulwell 73 and investment firm Cain International) and Sunderland City Council, which aims to create 8,000 jobs in the area.
A 40% relief in business rates for retail, hospitality and leisure in 2025-26 will also be of note for the UK’s cinema sector, up to a cap of £110,000. This is a reduction from the 75% relief up to a cap of £110,000 that is set to end in April 2025.
The Labour government has identified the imaginative industries as one of eight growth-driving sectors within its ’industrial strategy’ and has introduced a £3m investment in expanding opportunities for teenage people to consider a career in the imaginative industries.
”Collectively these measures demonstrate confidence in our sector’s capability to grow its contribution to the imaginative industries and the UK economy,” said Ben Roberts, BFI chief executive.
COMMENTS