We have welcomed the Government’s announcement that it will help to support the UK’s independent film sector by increasing the Film Tax Credit to 40% for films with budgets of up to £15m. We believe that the enhanced film tax credit will help strengthen the indigenous film sector’s ability to attract finance and to continue developing key talent which will benefit the wider audiovisual sector.
Additionally, whilst the audiovisual tax reliefs have played a vital role in making the UK one of the most successful screen sectors in the world, strong global competition from many countries boosting their own tax incentives has meant that UK independent filmmakers have chosen to film on location abroad rather than in the UK. We believe that the uplift in the film tax credit will lead to more producers choosing to film in the UK, sustaining jobs and creating new opportunities.
Pact campaign
Following a review by the BFI in July 2022, Pact commissioned two pieces of research from Oliver & Ohlbaum and Alma Economics to look at the challenges facing the UK independent film sector.
Despite the UK’s strong history of independent filmmaking, the O&O research found that the market has undergone significant changes over recent years with new entrants to the market, increased competition for viewers and changes in audience behaviour all weakening the commercial financing options available for indie films. Post-pandemic, the market share of UK independent films decreased considerably to 5% in 2021 and 8% in 2022, the lowest levels since 2016 when it reached 16%.
Additionally, the research by Alma Economics traced the careers of all film directors and producers in the UK since 1990 and found that films with budgets of over £15m tended not to launch the careers of new directors and producers in the UK, whereas films with budgets under £15m produced a spillover benefit by incubating talent. It also found that every £1 of spend on the production budgets of low budget UK films supports about £0.20 of subsequent filmmaking activity.
As a result of this research demonstrating a specific, measurable market failure for UK films with budgets under £15m, Pact campaigned for the introduction of an increased film tax credit, meeting with HMT officials and advisors, the CMS Committee, Ministers, the Secretary of State for Culture, Media and Sport, and the Prime Minister.
The campaign gained cross industry support from the BFI, MPA, Film4, BBC Film and Paramount, who all backed Pact’s proposals for the tax credit enhancement.
John McVay OBE, Pact Chief Executive, said: “I’m pleased that the Government has recognised the important role the British independent film sector plays in developing key talent and sustaining jobs across the economy.
“The sector has reached a critical point and this intervention will provide a lifeline to indie film producers by allowing them to access funding which will attract key creative talent and in turn give them the ability to recoup their initial investment.”
Ben Roberts, BFI Chief Executive, said: “This is a dramatic moment for UK film, and the most significant policy intervention since the 1990s. The positive impact will be felt across our industry, and through all the new films that audiences will get to enjoy. The films we make are vital to our culture expression and creativity - they reflect a diverse and global Britain, and build careers - and we’re grateful to Government, the DCMS, the industry and our friends at Pact for working together to realise this historic initiative.”
Mark Herbert, CEO, Warp Films, said: "As a producer, film will always be my first love. It’s where mine and Warp Films’ journey started and progressed - from Dead Man’s Shoes to Everybody’s Talking About Jamie. However, in recent years, it has become increasingly difficult to maintain a sustainable business producing films - due to the poor economics and increasing struggle to raise finance. Like many other companies, we’ve had to increasingly focus on making television as that is where more opportunities lie, as well as greater security for our business. An increased tax credit could have a real impact on our ability to finance films and support a sustainable business producing films. Film is a great place to find and breed new talent with diverse voices and I would relish the chance to have more opportunities to support those first and second time filmmakers. The majority of independent films are now filmed in the regions - as a proud Yorkshire company founder, I feel that this increased tax credit would boost the regional filmmaking eco-system that is so key to securing the future of the industry.”
Nicky Bentham, Founder/Producer, Neon Films, said: “For the first time in a long time I’m excited about the future of independent film in the UK. We’ve always had world class talent and stories to tell and now, thanks to the tireless efforts of Pact over a number of years, alongside brilliant support from the BFI and wider industry, we have the Government’s backing to be truly competitive and achieve our full creative and commercial potential on the global stage."
Julie Baines, Producer/Founder, Dan Films, said: “This year we celebrate the 30th anniversary of Dan Films. As an independent film production company we've lived through many challenges and have championed a diverse range of voices that have gone on to global recognition. The quality of British film is acknowledged worldwide, but rising costs and diminishing financing opportunities have really taken their toll on the sustainability of our industry. The Government's decision to enhance the UK Film Tax Credit is a game changer. It opens the door to our being more competitive in the international marketplace and secures the next generation of great British stories with great British talent. Thanks to the sterling work of Pact and the BFI the future is full of possibility.”
We would like to thank everyone involved in this successful campaign.