Following on from the announcement at Spring Budget of the introduction of a new Independent Film Tax Credit (“IFTC”) – commented upon here – on 9 October, the Government laid a Statutory Instrument (2024 No.1009) which provided crucial further detail regarding the qualifying criteria for the IFTC.

The announcement also gave the industry the much hoped-for certainty that the Labour government intended to go ahead with the implementation of a new tax credit first announced under the previous Conservative government.

The IFTC is an above-the-line credit available for films that have total core expenditure of up to £23.5m and that have received accreditation from the British Film Institute (“BFI”) that the following conditions are met:

• the film’s total core expenditure does not exceed £23.5 million (the “budget condition”); and
• the film has either a UK writer or UK director or is a qualifying co-production (the “creative connection condition”).

In order to qualify for the relief, productions must have started principal photography on or after 1 April 2024.

IFTC can be claimed on £15 million of qualifying core expenditure at a credit rate of 53% (which equates to an effective rate of 39.75%). As with other creative reliefs, qualifying expenditure is capped at a maximum of 80% of a film’s total core expenditure. This means that a maximum of £12m (i.e. 80% of £15m) can qualify for relief under the IFTC.

Commenting on the announcement as the London Film Festival was set to begin, the Culture Secretary, Lisa Nandy, said “the UK’s first-class independent filmmakers have a track record of creating cult classics and surprise hits that are enjoyed by millions. Their films showcase British culture and creativity to the world while also supporting thousands of jobs and driving economic growth in all parts of the UK. These reliefs will pay dividends both culturally and economically, inspire the next generation of talent across the country, deliver more great British content, and sustain a world-leading industry here in the UK.”

The IFTC will apply to expenditure incurred on or after 1 April 2024 and claims can be submitted to HMRC after 1 April 2025. The BFI certification unit is expecting to be able to accept applications for the IFTC from 30 October 2024 (subject to relevant legislation coming into force). More information can be found in the Government press release  here.