The Culture, Media and Sport Committee has called on the Chancellor to use next month’s Budget to bring forward tax relief to support the distribution and exhibition of independent British films.
In a letter to Rachel Reeves, the Committee calls for the introduction of a 25% tax relief for the prints and advertising costs of films claiming the Independent Film Tax Credit (IFTC), as recommended in April’s report on British film and high end TV.
The Committee warns that while there are early signs that the IFTC is making a difference to the industry, there are still challenges when it comes to distribution and exhibition. The letter adds that the additional tax relief has the power to generate a cycle of investment into independent British film.
Chair of the CMS Committee, Dame Caroline Dinenage MP, said: “The introduction of the Independent Film Tax Credit in the last Budget has provided a welcome boost to our film industry, but without proper marketing many great British films end up missing out on the audiences they deserve.
“With the Government’s industrial strategy recognising film and TV as a frontier industry, the Chancellor now has the chance to follow through on the Government’s commitment, support the independent film sector and demonstrate that she recognises the potential it has to drive growth and create jobs.”
The letter in full
Dear Rachel,
The Culture, Media and Sport Committee’s first report of this Parliament, British Film and High-End TV, was the culmination of almost two years of work across two Parliaments. In it, we made proposals that would grow both inward investment and British filmmaking.
The Government’s decision to prioritise the Creative Industries in its Industrial Strategy, and to recognise film and TV as a frontier industry, are welcome signs of the continued commitment to the sector made by successive Governments. Your decision in your first budget to proceed with the Independent Film Tax Credit (IFTC) and for the additional relief for visual effects, both of which the Committee had previously advocated for, were welcome boosts to the British screen industry with the potential to drive growth and create jobs.
However, the evidence we received during our inquiry demonstrated that these changes were only part of what is needed to support the domestic independent sector, and the decision of the Government to reject or delay on many of the recommendations we made has been disappointing.
Looking specifically at the support for independent British filmmaking, the IFTC is already showing signs of helping the domestic sector to make films, but the value of this cannot be fully realised unless those films are seen. Whilst we have witnessed the very best of British filmmaking recently with the likes of Conclave receiving great awards acclaim or, more recently, I Swear playing to packed audiences nationwide, there are countless films that end up not getting the audiences they deserve.
Even top-quality films cannot find an audience without distributors and their investment in promoting films. Cinemas will not programme films without marketing spend attached, as the risk would be too great. The IFTC will successfully offset the risk of making independent British films, but alone it will not offset the challenges of distribution and exhibition.
BFI research has found that 95% of the population watches at least one film a year, and DCMS’s 2024 Participation Survey found that half of the country visits a cinema each year. Cinemas are the driving force behind film’s income streams, and they are an easy and affordable way to bring culture to our towns and cities. But, in order to thrive, our cinemas need more high-quality, well-marketed British films. That is why in our report we recommended that alongside the IFTC:
In the Autumn 2025 Budget, the Government should introduce a 25% tax relief for the Prints & Advertising (P&A) costs of films claiming the Independent Film Tax Credit, to support the distribution and exhibition of British films.1
Since our report the Film Distributors Association, which advocated powerfully to us for this change, has commissioned modelling of the potential impact of their proposal, which found a return of more than £7 for every £1 spent on the relief, including a net positive return to the Treasury. To put this into further perspective, the cost of this much-needed intervention would only equate to 2% of the total amount of film tax relief claimed on production costs.
The return on investment would see more independent British films on screens and more people in cinemas seeing a wider range of films. As well as cinemas, filmmakers and distributors, the relief would benefit advertising and marketing businesses – another high-potential sub-sector in the Creative Industries Sector Plan – as well local authorities and high streets across the country.
We urge you to bring forward this tax relief in next month’s budget. It has the power to generate a cycle of investment into independent British films and to the amazing talent in front of and behind the camera who make them possible.
Yours sincerely,
Dame Caroline Dinenage MP
Chair, Culture, Media and Sport Committee
Staff Reporter
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