The UK government has approved the Independent Film Tax Credit (IFTC), fostering growth in the indie film sector.
- Applications for the IFTC will be accepted from October 30, as confirmed by the BFI certification unit.
- The IFTC provides enhanced financial relief for films with budgets up to £15m, incentivising independent production.
- To qualify, films must satisfy specific cultural and production criteria set by the BFI.
- This tax credit is a response to rising costs and competitive pressures faced by independent filmmakers.
The UK government has officially sanctioned the Independent Film Tax Credit (IFTC), a landmark development for the independent film industry. Announced by Chancellor Rachel Reeves and Culture Secretary Lisa Nandy, this decision was confirmed on the eve of the BFI London Film Festival. This initiative aims to fortify the independent film sector by providing substantial financial incentives.
The British Film Institute (BFI) has declared that its certification unit will start processing applications for the IFTC from October 30, 2024. To manage the anticipated demand, the BFI has expanded its team, adding five new staff members. Productions seeking to benefit must have commenced principal photography on or after April 1, 2024, and any qualifying expenditure must be incurred from the same date.
The IFTC, known formally as the ‘enhanced audiovisual expenditure credit for low-budget films’, targets productions with budgets up to £15m. It offers an enhanced credit of 53%, translating to around 40% actual relief, on up to 80% of qualifying expenses. This move is designed to make independent filmmaking more financially viable amid escalating production costs.
To be eligible for this credit, films must adhere to the BFI’s established cultural test and should feature either a UK writer or director or qualify as a UK co-production. Productions exceeding the £15m budget threshold, up to £23.5m, can partially benefit by claiming up to 80% of £15m of the UK qualifying spend. This tiered support reflects a strategic approach to bolster a range of productions, accommodating both fixed low-budget and slightly higher-budget films within the IFTC framework.
The introduction of the IFTC follows extensive lobbying by trade body Pact, the BFI, and the independent sector, highlighting mounting financial challenges posed by lavishly funded streaming services. Initially proposed under the last Conservative government, its implementation was delayed by the subsequent general election. However, these legislative hurdles have now been overcome, marking a significant policy advancement for the UK’s creative industries.
The Independent Film Tax Credit heralds a new era of opportunity for the UK’s independent filmmaking community, promising a more sustainable creative future.