UK VFX trade body, UK Screen Alliance, has welcomed the Chancellor’s commitment today to give further incentives for the UK’s VFX industry.
In today’s Autumn Statement, Chancellor Jeremy Hunt pledged to provide additional tax relief for expenditure on visual effects to address industry concerns over the competitiveness of the UK’s current incentive compared to other territories.
The Treasury has issued a call for evidence to inform the development of detailed proposals and Hunt said in the foreword to the consultation document: “I can confirm that we will provide more additional tax relief for expenditure on visual effects, to boost the international competitiveness of the UK’s offer. This call for evidence takes the first, crucial step towards this, as it will provide the Government with the depth of understanding it needs to develop targeted proposals that best serve the needs of the visual effects industry.”
The VFX industry in the UK and UK Screen Alliance has long campaigned for reform to the UK’s screen sector tax credits, as the way they are structured disadvantages VFX while other territories have increased the attractiveness of their incentive programmes.
When the UK’s screen sector tax reliefs were designed in 2007, the UK was bound by an EU restriction, which stipulated that tax relief should have a territorial cap. Once the cap is reached, VFX, being the most ‘portable’ part of the budget, has often moved outside of the UK to a jurisdiction that will make tax relief available.
Analysis of UK production between 2017 and 2019, reveals that £1bn of VFX expenditure on projects qualifying for UK Tax relief was carried out overseas – approximately half of all VFX work carried out on UK-qualified productions in that time period.
Neil Hatton, CEO of UK Screen Alliance said, “Very often clients will say, ‘We love your creativity, your innovation and reliability to deliver. We love your people and we love working in the UK, but your VFX incentive doesn’t meet what is available elsewhere in the world.’ Either that or, ‘We are capped-out’. This consultation and the promise of a more competitive incentive, announced today should aim to position the UK as the first choice destination for VFX production for international film and TV. We are focussed on capturing a larger market share as global demand for VFX recovers, following the US actors’ strike, and we aim to play a full part in growing the UK’s Creative Industries towards the Government’s 2030 targets.”
The Government’s stated aim is to grow the Creative Industries by a further £50 billion in GVA adding one million new jobs by 2030.
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