As part of the 2024 Budget, UK chancellor Jeremy Hunt has announced improvements to the film and high-end TV incentives specifically for visual effects.
The government has proposed that for productions spending more than 5 per cent of their budget on VFX in the UK, it will lift the 80 per cent cap on total eligible expenditure for the VFX spend only, and that the rate of Audio Visual Expenditure Credit (AVEC) for the VFX spend will be lifted to 39 per cent, which represents a rate of 29.25 per cent after tax, an effective increase of 3.75 per cent.
However, for productions shooting in the UK, the removal of the cap means that they will now be incentivised to stay in UK for their VFX, effectively an increase of almost 30 per cent in the rate of incentive for VFX in this scenario.
According to UK Screen Alliance estimates, these changes are likely to stimulate an additional £175 million of VFX work to be performed in the UK; a 32 per cent increase on the annual pre-pandemic VFX spend on film and high-end TV.
This will generate 2,000 new high-tech and high-productivity jobs in VFX and a further 800 indirect jobs, said the organisation.
Neil Hatton, CEO of UK Screen Alliance, the trade association representing VFX said, welcomed the changes: “This is a major breakthrough. Before, productions would either film in the UK or do their VFX here, but rarely both, because of the cap on tax relief. That will no longer be the case and the significant growth potential in the UK’s VFX sector will now be unlocked.”
