Last Wednesday (6th March), the Chancellor delivered what looks set to be one of the final budget before the General Election.
Pact welcomed the Government’s announcement that it will help the independent film sector by increasing the rate of the Film Tax Relief to 40% (53% under the new Audiovisual Expenditure Credit) for films with a budget under £15m. This follows two years of campaigning on the issue by Pact, the BFI, and others across the sector. Further information on the new UK Independent Film Tax credit can be found here.
Creative Industries
As one of the Prime Minister’s priority sectors for economic growth, the creative industries featured heavily in the Spring Budget, with the Chancellor announcing a package of measures to support the sector. Including:
• The introduction of a 40% relief on gross business rates bills for eligible film studios in England until 2034.
• Funding the National Film and Television School proposal for an extension subject to a business case demonstrating value for money. This extension would allow the school to offer up to 200 apprenticeship places per year, new courses including the use of AI and improve facilities for students with physical disabilities.
• A 5% increase in tax relief for UK visual effects costs in film and high-end TV under the Audiovisual Expenditure Credit (AVEC).
• UK visual effects costs will also be exempt from the AVEC’s 80% cap on qualifying expenditure.
Changes to the AVEC for UK visual effects costs will take effect from 1 April 2025. There will be no additional eligibility criteria for the additional tax relief. However, the Government will be publishing a consultation on the types of costs that will be scope of the additional tax relief.
Business and SME support
The Recovery Loan Scheme, which supports SMEs access finance and was originally designed to support businesses post-COVID, has been renamed as the Growth Guarantee Scheme and will be extended until the end of March 2026. This scheme provides a 70% guarantee to participating lenders on finance of up to £2m offered to smaller businesses.
Further information about the scheme, including the eligibility criteria, can be found here.
Other measures
The Chancellor also announced a reduction in National Insurance contributions. From 6 April 2024, Employee National Insurance will be cut from 10% to 8%. This is on top of the 2% reduction in January this year. The rate of Class 4 National Insurance Contributions paid by the self-employed will also be reduced 8% to 6%.
The Chancellor also announced further details of investment zones in Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, the West Midlands and Tees Valley. It was also confirmed that the Tees Valley Investment Zone will focus on the digital and creative sectors, with £160m being invested by the Government over a ten-year period.