Comment: the Independent Film Tax Credit is a victory for the UK industry

I swear I could hear the collective cheer on March 6 as the entire UK independent film industry punched the air in unison at chancellor Jeremy Hunt’s declaration as part of his spring budget that he would be raising tax relief for independent UK features under £15m ($19.1m).

This is a hard-fought and well-deserved victory for the UK film industry, and the culmination of a years-long struggle that Screen International has been documenting – and supporting – as the issue crystallised for the entire community in the face of an ever-evolving landscape for production, distribution and audience consumption patterns. And it’s the hard work of so many people in the UK industry – from the most powerful to those whose voices might not carry as much weight but whose passions shine just as strongly – that has brought this to fruition. The feeling of jubilation is hugely vindicated.

While the precise details are still to be clarified, as a direct policy statement the new UK Independent Film Tax Credit (IFTC) will enable eligible films to claim enhanced Audio-Visual Expenditure Credit (AVEC) at a rate of 53% on qualifying expenditure, which equates to 40% in relief (up from the headline credit rate of 34% AVEC and 25.5% in relief).

This is what the industry has been lobbying tirelessly for, and there is no doubt it will bring a gargantuan boost to the ability to make and distribute independent UK films at home and abroad. It’s an injection of confidence for producers, who will have more ability to get their projects made; for financiers who want to invest in those projects; for distributors and exhibitors, who have lamented the absence in the market of quality UK films able to lure audiences into cinemas; and to the audiences themselves, who have shown themselves willing to come out for well-told British stories as evidenced recently by strong box-office results for The Great Escaper, One Life and All Of Us Strangers.

As part of the announcement, the BFI will be establishing new criteria for films to qualify – sketchily identified in the initial HMRC declaration as having a UK writer or director or be an official UK co-production. It’s too early to comment on what the new criteria will mean for productions, although the IFTC will seemingly also be available to any US studio or streamer that makes a UK-­qualifying film under £15m – so could encourage more activity in the space from these companies as well to back more UK films in the future.

What’s interesting is the need for productions to have a theatrical release to qualify for the IFTC – and we wait to see what parameters are set around that in terms of screen count and windowing. We at Screen would like to make a request right now to the BFI and HMRC: can you please ensure that any IFTC-qualifying films are required to report their UK box office in order to claim the credit.