Mar 7, 2024

The UK Screen Alliance says the new tax credit could create 2,000VFX jobs.

British vfx and animation studios are celebrating a much-needed victory this week after the UK Treasury announced its Spring budget on Wednesday. The new budget includes bolstering support for the territory film sector by introducing spending credits of up to 1500 million pounds (ド1910 million) for UK film productions with a budget of 53% (equivalent to a tax cut of about 40%).

According to the UK Screen Alliance, the new system makes the UK visual effects industry significantly more competitive. The organization claims it has the potential to stimulate up to 17,500 million pounds (ド22,320 million) in the country's vfx sector, create up to 2,000 new high-tech and high-productivity jobs with vfx and create another 800 indirect jobs.

Change has been going on for years, and organisations such as the UK Screen Alliance, the British Film Institute (BFI) and Animation UK have lobbied strongly for government intervention to support this important but serious challenge that is part of the UK film industry."

Changes in spending credits will be available to any UK film in the UK. Certified as a writer or director, or an official UK co-production.

According to Animation UK, structural change:

[M] arks a moment of transformation for the sector as producers and filmmakers are increasingly struggling to fund films at this level and get them into production in the UK.

Movies that meet the established criteria can claim an increase in audiovisual spending credit (AVEC) from 2024-4-1, from 34% to 53%. AVEC replaces the movie tax cut rate, which offers 25% of the UK eligible. Spending up to 80% of the film's total production budget. A 53% AVEC is equivalent to a bailout rate of about 40% under the film tax bailout.

After the spring budget was announced, figures from across the animation and vfx industry expressed their excitement about the change.

Kate O'Connor, Chairman of Animation UK, said that

Animation UK is eagerly accepting today's budget announcement, in particular the introduction of the vfx tax cut and a significant increase in the tax rate for indie films. With the new rate set at 54%, our sector anticipates a significant impact and is driving further animation production in the UK. In addition, the VFX proposal will directly benefit our animation studio and enhance our ability to provide top-class vfx services. This momentous opportunity marks an important milestone in the evolution of our digital production division, paving the way for unprecedented growth and innovation.

Mel Sullivan, CEO of Framestore, said in a statement: The vfx industry is recognized around the world for its creativity and innovation, it faces tough competition from other regions that offer generous tax incentives. Today's statement promises to be a real boost for our industry and a driving force for digital skills, jobs and growth more broadly and across the UK.We recognize the importance of this sector and appreciate the Treasury's commitment to ensure that award-winning companies like us continue to thrive and succeed.

According to sean Clarke, Managing Director of Aardman Animations,

This is a welcome announcement at a time when funding for independent filmmaking in the UK is really difficult.This is important in helping Aardman continue to do his best in producing British animated films for audiences around the world.

Ben Roberts, Chief Executive of BFI, said:

This is a dramatic moment for British cinema and the most important policy intervention since the 1990s. A positive impact is felt across our industry and through all the new films that the audience gets to enjoy. The films we make are essential to our culture, expression and creativity - they reflect a diverse and global UK and build careers.