George Osborne announces extension to UK Film & TV tax credits

Chancellor George Osborne announced today an increase in the rate of tax relief for film and TV productions in the UK.

The new rate of relief will go up to 25% for the first £20m of expenditure, followed by a 20% rate after that. All qualifying productions regardless of their budget will benefit from one tax rule as part of the new measure.

The higher tax credit rate is aimed at boosting local productions and extending the relief to encourage more job creation in the creative sector while providing investors with opportunities to reduce their operational costs.

In addition to this measure, animation and TV productions will be able to qualify for tax relief if 10% of their budget is spent locally instead of the previous 25% threshold. The British government also announced a new children's TV tax relief that will commence in April and an extension to the Skills Investment Fund to boost training in the creative industries.

Corporation tax is also due to fall to 20% encouraging further investment in the UK's creative and digital economy. Osborne also announced a new tax credit for orchestras after recent consultations and is inviting new proposals regarding the local newspaper industry to provide further relief in the future.

Freelancers and film production crew in the UK will also benefit from an increased tax-free allowance of £10,800 in 2016, and £11000 in 2017.

Following a record year for the British film industry, the UK's creative sector is set to become one of the world's most competitive with generous tax incentives rivalling Canada, the U.S and New Zealand.