UK Government Announces VFX Tax Relief

by Graham Edwards

Last week, VFX artists in California held a rally drawing attention to issues raised by differences in subsidies throughout the global visual effects industry. The difficulties currently faced by VFX facilities in the USA stand in stark contrast to the benefits being enjoyed by their counterparts in the UK.

Today, in the UK Chancellor’s Autumn Statement, it was announced that, from April 2014, UK film tax relief is to be extended to support Digital Visual Effects. A key contributor to the Government’s decision-making process was UK Screen, the trade association for the film and TV facilities sector. They in turn took advice from Europe’s largest visual effects facility, Double Negative.

Alex Hope - Managing Director of Double NegativeAlex Hope, managing director of Double Negative, had this to say about these latest tax changes:

“Adjusting the film tax relief so that it reflects changes in the production process will enable the UK industry to capitalise on its strengths in VFX and cutting-edge production technologies. This makes financial and creative sense.

“Digital technologies have transformed the film-making process, and will continue to do so, giving film-makers new ways to tell their stories. VFX sits in the vanguard of these changes, with increases in VFX budgets from between 10 and 50% of the overall budget. This can be £20m-£25m on just one film.

“It is vital that the UK has an integrated approach to the digital future of the film industry. The Government has recognised this with the support announced in April’s budget for R&D into digital content production through the Technology Strategy Board, and support for skills development in the sector, through the Skills Investment Fund. Today’s announcement is crucial in giving VFX companies confidence to continue investing in their UK-based operations and generating further growth for film and the creative industries.

“Over the past 15 years the UK’s VFX businesses have made significant investment in infrastructure, skills and training and the UK has established itself as a global centre for VFX, winning Academy Awards® and securing further incoming production business. The UK film industry has benefited from being able to offer a complete service covering all aspects film-making activity, but until today’s announcement the structure of the tax relief, whilst attracting production activity to the UK, has resulted in some films shooting in the UK taking VFX work overseas.

“Today’s measures target the integral role of VFX in film-making and productions that would not otherwise qualify for tax relief and incentivise them to bring VFX or production business to the UK, representing a significant growth opportunity for the UK film industry.”