To qualify for film tax relief (FTR), production companies must demonstrate their film is intended for theatrical release to the paying public at commercial cinemas at the end of each accounting period.

While cinemas were closed during lockdown, some film productions meant for the big screen were switched to Netflix or similar digital TV platforms – a change of intention that would block access to FTR. The films would then need to qualify for high-end TV (HETV) relief, which is subject to the £1m per slot hour requirement – something that’s not required to claim film tax relief.

However, it was announced in the autumn Budget that film production companies which switch to an intention for broadcast release will continue to qualify for FTR – even after a change in intention which means a film isn’t screened at cinemas. The change will come into effect from 1 April 2022.

The initial intention is the key to determine which tax credit is to be claimed. This is to ensure television productions do not use the above allowance as a means to avoid the limit of £1m spend per broadcast hour currently imposed on HETV but not on FTR. However, this is not the intended purpose of the change in FTR rules.

There’s more information on gov.uk – see here.  Also, please contact one of our team of specialists shown on this page.

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary.

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