Relaxation of film tax relief rules

The film industry has been one of the hardest hit sectors during the Covid-19 pandemic; with all UK cinemas temporarily forced to close their doors, enduring months without being able to welcome customers.

There was however welcome news for the industry as the Chancellor announced a relaxation of the conditions for Film Tax Relief (FTR). Where a theatrical release was intended for a film but instead was broadcast on television, the production company will still be eligible for FTR provided the conditions for High-end television relief (TVR) were met.

One of the conditions for High-End Television Relief is that the budget per hour of screen time is £1m. In the year to March 2020 there were 367 films made in the UK that met the cultural test to be eligible for FTR. Of these films, the median budget at final certification was £220,000. If we consider a typical film of 90mins long, then the minimum budget to qualify for this extension of the relief is almost 7 times the median budget at £1.5m!

For those films which do not qualify for the above extension, FTR does of course remain available however, as part of the eligibility criteria, there must have been an intention to have a theatrical release at the end of the accounting period in which a claim is being made.

For example, a company produces a film in the financial year to 31 March 2021 but decides in August 2021 to broadcast the film on television or release on streaming platforms. Provided there was an intention in March to release in cinemas then FTR would still be available. But be aware, HMRC would likely seek evidence of the intention via board minutes or discussions with cinemas.

Whilst the extension of FTR to TV releases will be welcomed by many, it evidently overlooks the smaller film producers that will not meet the £1m threshold and are, arguably, more likely to be in need of the tax relief.

If you have any queries about Film Tax relief or any other cultural tax reliefs, contact our team today at

Author: Conall Boyle, CT: Corporate Tax