The Chancellor, Jeremy Hunt has today announced his Autumn Statement for Growth. Whilst there are some positive measures included for indie producers, there was no mention of any measures to further support the independent film sector, which is a missed opportunity for Ministers to remedy a clear market failure.

Positives

The Government has listened to our concerns around proposals to reform connected party transactions and the documentary definition for the HETV Tax Relief, which were set out in the draft Finance Bill over the summer.

The proposal to cap the relief that companies can receive on connected party transactions has been amended. Companies will now be required to disclose connected party transactions and charge connected parties at an arms length.

There will also be a new definition of documentary in line with guidance used by the BFI.

The Government will also be reviewing public investment in R&D spending for the creative industries, which is a welcome move.

No mention of help for independent film sector

However, Ministers have missed an opportunity to remedy a clear market failure within the independent film sector.

The UK has a strong history of independent filmmaking from Trainspotting and Bend it Like Beckham to more recent successes such as The Favourite and Aftersun. However, investment into indie films has been in consistent decline and producers are finding it increasingly difficult to secure financing in a challenging market. Over the past few months, Pact has met with Ministers and other key officials and has made them aware that the sector is now at the point of market failure.

Earlier this year, Pact commissioned research which has been shared with the Government and is available today (please find reports at the bottom of this webpage). This research clearly shows that there is a specific, measurable market failure for UK films with budgets under £15m and also shows the important role that low budget films have in discovering and launching the careers of key creative talent.

To address these issues and to stimulate investment into the sector, Pact has proposed an increase of 40% to the Film Tax Relief for films of a budget between £1 - £15m.

Pact CEO John McVay OBE said: “An increase to the Film Tax Relief of 40% would stimulate investment into the sector, create jobs and opportunities for new talent, which in turn would benefit the wider audiovisual economy.

“As the creative industries are one of the Prime Minister’s priority sectors for economic growth we urge the Government to not to miss this opportunity to grow a culturally and economically important part of the creative industries.”

Pact will continue to lobby Government on this issue.

Read more about the Chancellor's Autumn Statement here.

Research

A Review of the Challenges Facing UK Independent Film and the Impact of Tax Relief Support – 2023.pdf

Measuring the Spillover Benefits of Independent Film – 2023 – Alma Economics.pdf