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Film Tax Credits Explained

Get your Film Tax Credit with Adsum

We give our users a pre-approved credit limit to the value of their Film Tax Credit which they can utilise from the moment their claim is submitted to HMRC.

UK Film Tax Credits can be complicated, but they’re worth investigating if you need extra funding for your production.

That’s because this government incentive allows production companies involved in pre, production and post-production activities, photography, and delivering the film, to claim film tax relief – and that can go a long way in getting your film over the finish line.

If you already know about Film Tax credits, then talk to us to get instant access to what you’re owed.

Otherwise, read on to see how UK film tax relief can relieve the financial burden of your production and whether you’re eligible.

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What are film tax credits?

Film tax relief is a type of tax credit set up by the government to boost the UK creative industry. It’s designed to help film production companies reduce the amount of tax they have to pay or to claim a payable tax credit (i.e. more money coming to you). There are a few things your production company or film must do to qualify for film tax relief. If your film and production company meets all the below criteria, then start your film tax relief claim with Adsum today.

Your film must be...

Certified as British by the British Film Institute; intended for theatrical release

Intended for theatrical release

Have at least 10% of its core costs – such as production, pre and post production and photography – relate to activities in the UK

The company claiming the UK Film Tax Credits must be responsible for...

Pre-production and post-production

Principal photography

Delivering the completed film

Your production company must also...

Be primarily involved in planning and decision-making

Directly negotiate, contract and pay for rights, goods and services

How much is film tax relief worth?

UK film tax credits work by lowering the amount of corporation tax you must pay or, if your film makes a loss, by awarding you a tax credit worth up to 20%.

If you make a profit, the amount of tax you pay amounts to whichever is the lower of the following:

  • 80% of total core expenditure
  • The core expenditure total for goods or services provided from the UK and EEA

How do you get certified as British using the BFI Cultural Test for films?

In order for your film to qualify for UK film tax credits, it needs to be certified as British by the BFI.

This is done using the cultural test for film and is a points-based test with a total of 35 available. You need 18 points to gain certification. The points are broken down and awarded as follows:

Cultural content - 18 points

Up to 4 points are available for films set in the UK or a European Economic Area (EEA)

Up to 4 for lead British of EEA characters

Up to 4 for British or EEA subject matter

Up to 6 points for dialogue recorded mainly in English or UK indigenous or EEA languages

Cultural hubs - 7 points

Up to 2 points are available if at least 50% of the principal photography or SFX takes place in the UK

Up to 2 points are available if at least 50% of the VFX takes place in the UK

An extra 2 points can be awarded if at least 80% of principal photography or VFX or SFX takes place in the UK

a further 1 point can be awarded for music recording, audio post production, and picture post production facilities from the UK or EEA

Cultural practitioners - 8 points

A total of 8 points are available for using personnel who are UK or EEA citizens and residents. For each of the following, 1 point will be awarded:

Director, Scriptwriter, Producer, Composer, lead actors, majority of cast, key staff (such as the lead cinematographer, costume designer, editor, hair and make-up designer etc), and majority of the crew

Cultural contribution - 4 points

A total of 4 points are available for elements of the film that show British heritage, creativity, and diversity

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How Adsum helped fund a short film series

“The process with Adsum was really quick and straight forward. We enquired on the Tuesday and the funds were in our account by the end of Thursday meaning we could pay our costs and continue with our next series of films. Who knows how long it would have taken if we waited for HMRC.”

Understanding Creative Industry Tax Credits

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