The Government has formally passed the eagerly anticipated Independent Film Tax Credit (IFTC) into law.

This means that qualifying film productions with budgets of up to £15 million (excluding marketing and distribution) will benefit from an increased tax relief of 53% (starting from 30 October), providing a much-needed boost to the UK independent film industry. Films with a budget of up of £23.5 million are also eligible for the IFTC but they can only claim the IFTC on up to a maximum of 80% of £15m of the core expenditure.

The maximum credit a film can receive is £6.36 million (which is based on the maximum a film would be entitled to if it had a total core expenditure of £15m). The credit is subject to corporation tax at the applicable rate.

To qualify for the IFTC: 

• productions must pass the existing BFI cultural test and have a UK writer or director or be certified as an official UK co-production; 
• productions must have started principal photography on or after April 1 2024 and relief can only be claimed on expenditure incurred on or after this date; and
• the film must be intended for theatrical release (the IFTC will not be available for TV programmes).

Claims for IFTC relief can be submitted to HMRC from 1 April 2025 onwards.

The independent film industry in the UK has been struggling in the face of tight budgets and high production costs. This financial relief will encourage more indie film production which has in recent times been undertaken outside the UK attracted by foreign tax incentives. Ireland has historically benefited from a tax credit of 32% making Ireland an attractive location for indie film production. The Irish government recently announced that Ireland will receive a boosted tax incentive of 40% for films budgeted under €20m (£16.7m).