Figures from across the industry have been broadly supportive of the Chancellors announcement
By Matthew Corrigan
Published: October 30, 2024 Updated: November 1, 2024
Figures from across the industry have been broadly supportive of the Chancellor's announcement
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Figures from across the UK's media and entertainment sector have reacted to the new Chancellor's first budget.
In her first Budget speech, Chancellor of the Exchequer, Rachel Reeves MP, announced a forthcoming tax relief package aimed at reducing costs for visual effects (VFX) production for our world-beating creative industries.
From April 2025, film and high-end TV productions will be able to claim an enhanced 39 per cent rate of Audio-Visual Expenditure Credit on their UK VFX costs. Additionally, UK VFX costs will be exempt from the Audio-Visual Expenditure Credit's 80 per cent cap on qualifying expenditure. Costs incurred from 1st January 2025 will be eligible.
The budget announcement has been broadly welcomed by the UK's creative industry, with UK Screen Alliance stating the country is set to attract an additional £175 million per year of film and TV VFX spending, creating 2,800 new jobs. The government had previously identified the sector as a growth driver in its Industrial Strategy, unveiled earlier this month at its International Investment Summit.
UK Screen Alliance had campaigned for the removal of the cap and a more competitive rate of credit. Following the Chancellor's speech, Neil Hatton, the organisation's CEO, said: The confirmation in the Budget that the VFX rebate will be available from the New Year is terrific news for the UK's visual effects companies. We know that productions are making decisions right now on where to place their VFX work for 2025 and beyond. Today's announcement means that these clients will be incentivised to place many millions of dollars of inward investment work with the UK's award-winning VFX community, creating considerable value for the UK economy.
His sentiments were echoed by figures representing a broad cross-section of the creative community:
Sir William Sargent, chairman, Framestore Company 3, said: The UK's place at the heart of the global visual effects industry has been hard-fought, and these changes represent a significant step forward. This is a highly skilled, highly creative and highly innovative sector with technology at its heart, and the strides we make across film, TV, advertising and immersive experiences have wide-ranging benefits for a wide range of industries. As the impact of emerging technologies continues to grow, it is more vital than ever that we future-proof the UK as a place where the best artists, technologists and creative thinkers can push the boundaries of what is possible these changes will help them do just that.
Sue Lyster, executive in charge, Industrial Light and Magic, London added: We're incredibly pleased to hear the announcement of improvements to the VFX tax incentive in the Chancellor's Budget statement. This important step will undoubtedly retain and attract more VFX work to the UK.
Stefano Salvini, general manager, DNEG London said: The Chancellor's statement is very welcome news for our industry, and recognises its delivery of considerable economic value and strong potential for further growth. This announcement will incentivise productions to place more highly creative VFX work in the UK, driving technological innovation and crucially creating a significant number of new jobs in our industry. We are grateful that the government has also agreed to bring the implementation date forward, allowing these changes to make an immediate and positive impact on the UK's VFX sector.
BECTU, the UK's media and entertainment union, issued a statement welcoming the promising signs in Reeves' announcement, adding that they need to be backed up with the aforementioned Industrial Strategy. The union's head, Philippa Childs, said, There are promising signs in today's Budget that the government understands the incredible cultural and economic value of the creative industries. We welcome the minimum wage rise, which we hope will provide some welcome relief for many in the creative industries who continue to struggle due to low pay.
We're also pleased to see additional VFX tax reliefs, the boost for film and TV development in the North East and the wider commitment to driving growth and jobs across the nations and regions. We now want to see this localised funding translate into meaningful support for creative talent and jobs across the UK.
Many in the creative industries continue to face low pay, poor conditions and precarious employment and significant challenges remain for the workforce. We hope to see today's promising signs backed by a significant and sustained commitment to bolstering the sector via the government's Industrial Strategy.
Commenting on measures to boost the VFX sector, Anna Fry, partner and UK TMT tax market leader at consultants, EY, said, [The] announcement confirms that UK visual effects costs in film and high-end programmes will receive a 5% increase in Audio-Visual Expenditure Credit and can be outside of the 80% cap on qualifying expenditure. This broadly aligns with the previous government's proposals announced in the Spring Budget and will be well-received by the sector.
Although there are some caveats, such as the additional tax credit generally being available only after productions are completed, this measure highli
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Figures from across the industry have been broadly supportive of the Chancellors announcement
