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15 March 2024 | Comment | Article by Aled Walters

Spring Budget 2024: UK’s creative industries are one of the ‘growth sectors of the future’ and set to benefit from new tax reliefs

Spring budget 2024

The government’s creative industries sector vision, published in June 2023, stated its ambition as ‘nothing less than to grow the creative industries by an extra £50 billion while creating one million extra jobs by 2030.’ This aim has now been supported by the recent Spring Budget, delivered on 6th March 2024, which contains proposals for new tax reliefs aimed at supporting the creative industries, described by the Chancellor as one of the UK’s five ‘high growth sectors’.

Catalysing growth: Chancellor’s remarks on creative industries

Under the heading ‘Catalysing the growth sectors of the future’, the Chancellor noted that the creative industries contributed £125 billion in Gross Value Added (GVA) in 2022 and employ over two million people across the UK. These industries also play a vital role in British ‘soft power’ globally with an international reach and influence.

Announcement: Significant boost for creative industries

The Chancellor’s Spring Budget speech commented that studio space in the UK has doubled in the last three years and at the current rate of expansion, the UK will be second only to Hollywood globally by the end of 2025.

A significant boost to the UK’s creative industries has been announced

The Chancellor announced a package of support that will provide over £1bn in additional tax relief over the next five years. This will cover: support to independent film that ‘incubates UK talent’: A new Independent Film Tax Credit (IFTC) for independent films that can currently claim the Audio-Visual Expenditure Credit (AVEC). This credit ‘will be targeted towards lower budget films that incubate UK talent’. Films with budgets under £15 million that meet the conditions of a new British Film Institute test will be able to claim AVEC at a higher rate of 53%. The test is ‘also expected to require that either key talent on the film, such as the director and writer, must be from the UK, or the film must be an international co-production.’ Films that do not qualify as independent films can continue to claim AVEC at the basic rate of 34%, or the uplifted rate of 39% for animated films. The higher rate is available on expenditure incurred from 1 April 2024, for films which commence principal photography on or after 1 April 2024. Claims can be made from 1 April 2025. Companies will not be able to claim both the IFTC and the announced additional relief for visual effects expenditure (see point below) in respect of the same film.

  • Support for visual effects in film and high end TV: an increase in the rate of tax credit by five per cent and removal of the 80 per cent cap for visual effects costs. Enhanced reliefs for visual effects will begin in April 2025. Full details on this measure are still to be confirmed as the Government will consult on the types of expenditure to be covered. The total rate of relief for UK visual effects has now been boosted to 39%.
  • Promoting investment in studio infrastructure: having ‘listened carefully’ to representation from Pinewood, Sky Studios and Warner Brothers, eligible production studios in England will receive a 40 per cent relief on their gross business rates until 2034. This will prove a major boost to new development, for example Sky Studios’ proposed Elstree North scheme. The government also announced a devolution package for North East England, the ‘North east deeper devolution deal’ which will unlock funding for the Crown Works Studios complex in Sunderland, described by local leaders as ‘game changing’ for the region.
  • Expanding educational opportunities: an extension of funding for the National Film and Television School to contribute towards the expansion of its site at Beaconsfield Studios, subject to business case approval.
  • Support to theatres, museums, orchestras and galleries: from 1 April 2025, the rates of theatre tax relief (TTR), orchestra tax relief (OTR) and museums and galleries exhibition tax relief (MGETR) will be permanently set at 40% (for non-touring productions) and 45% (for touring productions and all orchestra productions). The rates for TTR, OTR and MGETR were due to taper to 30% and 35% in April 2025 but the government will legislate to make these current rates permanent. Additionally, the sunset clause for MGETR will be removed so that it becomes a permanent tax relief with no expiry date.
  • National Theatre funding: the government is providing £26.4 million to upgrade the National Theatre’s stages and infrastructure.

Industry response: Welcoming the Spring Budget measures

These announcements have been broadly welcomed by the industry. Overall, the Spring Budget sets out a significant number of focussed tax reliefs for creative industries which will no doubt be welcome to independent film producers struggling to compete with the budgets and resources of US studios.

Anticipated impact: Fuelling growth, jobs and investment in the creative sector

The increased support for devolved film industry initiatives will create further jobs, growth and investment in the UK film sector. And the support to theatres, orchestras and galleries rightly recognises the major contribution these sectors make to our national cultural life.

Author bio

Aled Walters


Aled Walters is a corporate, M&A and commercial partner who heads the commercial team. Aled advises on corporate and commercial matters, often advising on complex and high-value commercial agreements. He has significant experience advising on complex contracts and deals with a multi-jurisdictional dimension.

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