Film Tax Relief
Specialist tax support for film producers and independent production companiesFilm production requires significant investment before a project reaches its audience. Script development, cast and crew, equipment, studio facilities, post production and location costs all accumulate long before distribution. Film Production Company Relief provides a way to recover part of these costs and increase the financial resilience of production companies at every scale.
The relief supports both large scale feature films and smaller independent productions. It has been a long standing part of the creative industry reliefs and continues to evolve, with increased clarity on qualifying expenditure and permanent relief rates confirmed through recent government updates. For many production companies, this creates a timely opportunity to review their structure and ensure that the full value of the relief is being accessed.
Support for independent and emerging filmmakers
Film Relief helps smaller production companies secure funding at crucial early stages of development and production.
Reduced risk for larger projects
By offsetting part of the production cost, the relief strengthens financial planning for feature films and studio projects.
Cashflow benefits at key stages
Where relief creates a loss for Corporation Tax purposes, that loss can be surrendered for a payable credit. This can improve cashflow during or shortly after production.
Who can claim
The relief is claimed by a Film Production Company. This is the company that takes responsibility for the creative and financial elements of the film and is actively engaged in the production process.
The company must be within the United Kingdom Corporation Tax regime. It can be an established production company or a special purpose vehicle created for a specific film. For groups using multiple companies, we assist in determining which entity should be treated as the Film Production Company for tax relief purposes.
What productions qualify
To qualify, the film must:
• Be intended for theatrical release or wider viewing by the public
• Be certified as British under the Cultural Test or through an approved co production
• Have at least a quarter of its core expenditure relate to goods or services used or consumed in the United Kingdom
The rules apply to a wide range of projects, including feature films, independent films, documentaries and animated productions.
Films created primarily for training, advertising or video games do not fall within this relief. For those categories, different reliefs apply, and we can advise you accordingly.
What costs are covered
Film Relief focuses on core production expenditure. This generally includes:
• Pre production costs such as script development and storyboarding
• Cast, crew and director costs
• Production costs including studio hire, location fees, props, wardrobe and equipment
• Post production activities such as editing, sound design, music, CGI and grading
• Expenditure must be directly linked to the production of the film. Marketing, distribution, financing costs and general company administration do not qualify.
We work with your finance team and line producers to ensure the cost schedule aligns with HMRC expectations and is structured in a way that supports accurate claims.
How the relief works
For each accounting period, the Film Production Company identifies its core expenditure and calculates how much of that expenditure is used or consumed in the United Kingdom. An additional deduction is applied at 80 percent of the lower of total core expenditure or the UK proportion.
Where this enhanced deduction creates a loss, some or all of that loss can be surrendered for a payable tax credit. This credit can represent a significant source of funding, particularly for independent and early stage productions.
Our support includes reviewing your cost schedules, preparing enhanced deduction calculations and managing the submission process through the Corporation Tax return.
How Davenports Can Help
Successful claims rely on accurate cost allocation, clear production records and the correct company structure. We guide you through the process from start to finish.
We begin with a review of your production activity and your company structure. Where needed, we advise on whether a special purpose company should be used and how best to record expenditure for future claims.
Once the structure is in place, we:
• Work with your production accountant or finance team
• Review the cost schedule and identify qualifying expenditure
• Prepare the enhanced deduction computations
• Produce the supporting schedules for HMRC
• Submit the final claim through your Corporation Tax return
• Handle any follow up questions from HMRC
Our goal is to make Film Production Company Relief a predictable and reliable part of your financial planning.
Start with a complimentary eligibility review
If you are planning a film, currently in production or reviewing completed projects, we can help you determine whether a claim is available.
Our complimentary eligibility review outlines which films qualify and the likely value of the relief.