Box-office boost for film studios as 40% relief on business rates roll out begins, lasting until 2034
The government has announced a significant boost for the film industry, rolling out a 40% reduction in business rates bills for film studios over the next nine years. The move is part of a broader strategy to drive economic growth and support the country’s thriving creative sector, under the government’s Plan for Change.
Starting from Monday, local authorities will be able to implement and award the tax relief to eligible film studios, aiding filmmakers in producing the next generation of box office hits, cult classics, and major romantic comedies. The UK’s creative industry currently employs over 2.4 million people and contributes more than £120 billion to the economy. The introduction of business rates relief aims to further boost these figures by creating favourable conditions for investment and employment growth in the sector.
The government confirmed in October that it would proceed with the Film Studio Business Rates Relief, which will be available to qualifying studios in England until 2034. Where applicable, the relief will be backdated to 1 April 2024, ensuring immediate financial benefits for studios.
Chancellor of the Exchequer, Rachel Reeves, highlighted the UK’s influential role in the global film and television industry, stating, “The UK leads the world in creating great film and TV, and we should all be immensely proud of the impact we’ve had across the globe. From the Avengers to Indiana Jones, the UK has drawn in some of cinema’s biggest names thanks to a combination of fantastic local talent, a world-leading creative sector, and attractive tax incentives.”
Reeves further emphasised that, as part of the government’s Plan for Change, the initiative would contribute to strengthening the sector, generating more jobs, attracting investment, and increasing disposable income for working people. The business rates relief follows a series of wider initiatives introduced on 17 January, including financial support for start-up video game studios, grassroots music venues, and other creative businesses. The relief is designed to ensure that the UK remains a global leader in the creative industries, while also delivering on the government’s commitment to accelerating economic growth and increasing financial stability for individuals and businesses alike.
The UK leads the world in creating great film and TV, and we should all be immensely proud of the impact we’ve had across the globe. From the Avengers to Indiana Jones, the UK has drawn in some of cinema’s biggest names thanks to a combination of fantastic local talent, a world-leading creative sector, and attractive tax incentives- Rachel Reeves, Chancellor of the Exchequer
The UK’s film and television sector already benefits from various tax relief measures. The Audio-Visual Expenditure Credit (AVEC) allows production companies to claim tax credits of 34% on UK production costs for films and high-end television programmes. Additionally, animation and children’s television programmes are eligible for a higher credit rate of 39%.
From 1 April 2025, film and high-end television companies will also be able to claim a 39% credit on UK visual effects costs. Furthermore, films with budgets under £15 million will qualify for an enhanced 53% rate under the Independent Film Tax Credit. These incentives are designed to maintain the UK’s competitiveness as a prime destination for both domestic and international film production.
The announcement comes just ahead of the BAFTA Film Awards on 16 February, where the UK’s film and television industry gathers to celebrate outstanding achievements. Culture Secretary Lisa Nandy hailed the business rates relief as a crucial step in supporting an industry that continues to produce globally acclaimed films. “The UK’s film industry is truly world-class, producing global box office hits like Wicked and indie classics like Aftersun. The sector has huge potential for further economic growth, and the government is ambitious for its future. Our new tax incentive, alongside measures such as independent film tax relief and £25 million in funding for a new film studio in Sunderland, will ensure that we continue to create British content, international blockbusters, and high-quality jobs.”
Adrian Wootton OBE, Chief Executive of the British Film Commission, welcomed the government’s move, acknowledging its significance in sustaining the UK’s film and television industry: “The British film and TV industry is a creative and economic powerhouse, and our film studios are a vital contributor to this success. Today’s confirmation of Business Rates Relief for Film Studios in England is testament to the government’s recognition of this fact. The BFC is pleased that the government has listened to the sector’s concerns, and we are proud to have supported the development of this landmark intervention.”
Harriet Finney, Deputy CEO and Director of Corporate & Industry Affairs at the BFI, underscored the economic significance of the industry, “2024 saw a massive £5.6 billion of production spend in the UK, further confirming that our film and TV industries continue to be a powerful and vital growth industry. Our state-of-the-art studio spaces are central to that growth, so we welcome today’s announcement and the government’s recognition of their crucial role.”
Sara Putt, Chair of BAFTA, emphasised the importance of maintaining the UK’s status as a leading film and television hub, “The UK is a world-leading centre for film and TV production. Our studios provide world-class facilities, and the craft and production skills here are second to none. It is vital that the UK remains competitive for inward investment and continues to support a healthy talent pipeline.”
Simon Robinson, Chief Operating Officer of Warner Bros. Discovery Studios, also welcomed the initiative, “We welcome the Treasury’s announcement confirming its commitment to providing vital relief to business rates. It will create a stable environment for long-term investment, including securing the Warner Bros. Studios Leavesden expansion, which will create 4,000 direct and indirect jobs, and the opportunity for continued growth of the industry in the UK and U.S.”
The government’s decision to provide business rates relief for film studios is expected to reinforce the UK’s position as a global leader in the creative sector. By fostering a business-friendly environment and supporting innovation, the initiative ensures that the UK remains an attractive destination for filmmakers. With continued investment and strategic policies, the British film industry is set to thrive, bringing economic prosperity and cultural enrichment for years to come.
