New report shows UK tax reliefs help fuel boom in UK screen industries
Date posted: 09.10.2018
A new independent report published today demonstrates the huge value of the government tax reliefs across the UK's screen industries, seeding unprecedented levels of production, creating thousands of jobs, growing businesses and infrastructure, generating record levels of inward investment, boosting exports of UK productions and services internationally and creating spillover benefits for other industries.
The report, called Screen Business, reveals that an estimated £632 million in tax relief seeded £3.16 billion in direct production spend in 2016, a 17% increase on 2015. UK-made productions generated £7.9 billion as the screen sector's overall economic contribution (GVA), including £2 billion in tax revenues. Production spend which would not have taken place without the tax reliefs, known as additionality, was worth £4.1 billion in 2016.
Direct spend in 2016 was as follows:
· A record breaking £1.72 billion from film production, 47% up from £1.16 billion in 2013 and doubling over the nine years since the relief was introduced
· £896.7 million from high-end television production, more than double from £414.9 million in its introductory year of 2013
· £389.9 million from video games development supported by tax relief, 70% up from £228.8 million in 2015
· £97.1 million from animation television programme production, 27% up from £76.2 million in 2013
· £61.0 million from children's television programmes, the first year of tax relief
Rt Hon. Philip Hammond MP, Chancellor of the Exchequer said: "From TV shows like The Crown, to films like Darkest Hour, and animations like Peppa Pig, our creative industries are intrinsic to the rich cultural fabric of the UK. But they're also an important part of a dynamic and diversified economy, and a key component of our great, global trading nation. That is why this government is committed to supporting our highly-skilled and innovative creative industries through creative sector tax reliefs. I am confident that the creative industries will continue to grow, provide strong employment and be the face of British culture to the world in future years."
The report was welcomed by Minister for the Creative Industries, Margot James, who said: "The UK is a creative powerhouse for producing many award-winning films, shows and video games enjoyed by millions globally. It is home to incredible success stories such as James Bond, Batman Arkham, The Crown and Horrible Histories demonstrating that Britain is a hub for creativity. These fantastic statistics show investment in our screen industries is booming and government is committed to supporting their continued success through our tax reliefs and modern industrial strategy, which is helping our creative sectors go from strength to strength."
The tax reliefs play a crucial role supporting London's competitiveness as a creative destination, attracting inward investment from US and European markets.
Over 137,000 full-time equivalent jobs (FTE's) were generated by tax-relief supported screen productions in 2016- a 71% increase between 2013 and 2016. This rapid growth of the screen sectors has not only fuelled jobs, but over £850 million capital investment in new production facilities which in turn attribute toward more jobs. Recent builds and expansions include London's Dagenham Studios, Elstree Studios, Longcross Studios and Shepperton Studios. Unsurprising, as since 2013 the film tax relief has supported London film and TV productions ranging from UK independents such as Paddington 2, King of Thieves and Top Boy to world-wide phenomena's Star Wars, Avengers and Sherlock.
Adrian Wootton, Chief Executive of Film London and the British Film Commission says: "Film and high-end TV are big business, and the record-breaking inward investment figures demonstrate outstanding growth and the success of the UK in continuing to meet increasing demand, delivering world-class skills, talent and technical expertise. This fantastic achievement also spans animation and games, seeing the entire screen sector delivering at the highest level throughout the UK's nations and regions, and translating to economic growth, job creation and training opportunities. It is wonderful to see these figures clearly demonstrating the value of the tax reliefs in reaping incredible dividends for our economy and also for industry in terms of boosting infrastructure and opening up new business opportunities."
With particular locations so intrinsic to the story such as Harry Potter's platform 9/34 at Kings Cross, London, spill-over of the tax reliefs include tourism. Visitors to the UK spent an estimated £597.7 million in film-related tourism, generating £628.3 million in GVA and supporting 13,440 jobs and yielding £194.9 million in tax revenues. Merchandise sales related to film production in the UK generated estimated revenues of £295.0 million during 2016. For TV, the international success of high-end television productions such as The Crown and Downton Abbey, estimates a tourism spend of £266.2 million in 2016 generating 5,990 jobs £84.2 million in additional tax revenues.
The video games tax relief (VGTR) was introduced in 2014 to support the creation of UK-made and culturally-focused games and to enable the UK industry to grow and maintain its competitiveness in a growing global sector. Since then, the relief has helped develop over 200 video games, 4,640 jobs and £106.3 million in direct tax revenues. The UK video games sector has also attracted over £1.75 billion of inward investment, primarily from Chinese investors.
Dr Jo Twist OBE, CEO Ukie says: "The 'Screen Business' report proves what an economic, cultural and technological powerhouse the UK games industry is. The video games tax relief is an effective incentive to companies making games with a uniquely British and European flavour and UK-based talent, that otherwise might not have been made. The report is important in showing the return on the investment that the VGTR makes to the economy in employment, and enrichment of our cultural output. The video games tax relief is so important in providing confidence and certainty to the ecosystem we have in the UK and we look forward to its continued influence."
The report, called Screen Business, has been produced by analysts Olsberg SPI with Nordicity, and commissioned by the BFI, working with industry partners including the British Film Commission (BFC), Pact, Pinewood Group, UK Interactive (Ukie), the UK Screen Alliance and Animation UK.
Amanda Nevill, BFI CEO says: "Screens of all sizes are now central to our daily lives and today's report shows the UK as a global leader in creating the content for those screens. This new report endorses the huge part the government's tax incentives play in our success story, creating a fiscal environment that's boosting the economy, creating jobs and supporting our outstanding talent and infrastructure. The reliefs are also of huge cultural importance, enabling talent to produce the richest possible range of films, television programmes and video games, which create IP, and are loved by audiences both at home and around the world. It is the BFI's mission to maintain and improve this globally competitive environment for the future and the BFI stands ready to work with government and industry to help continue this growth in the years ahead."
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