Supplementary written evidence submitted by the
British Film Commission

In the context of the Invest 2035 Green Paper, film/HETV should be identified as a key subsector, with inward investment production – as supported by the BFC and national and regional partners – recognised as a primary driver that supports the whole industry.
Overseas investment in film/HETV is vital for the health of the UK’s screen sector as a whole: it provides financing that allows the wider ecosystem to flourish and produces British-qualifying creative content that is consumed worldwide. In turn, independent film and public service broadcasters provide important opportunities for new talent development and a vital pipeline of skilled workers. Furthermore, UK/US co-productions, such as those between HBO and the BBC (His Dark Materials), Netflix and Left Bank (The Crown), and many more, epitomise the vital creative, cultural and economic relationship between inward investment and domestic producers. Without such activity, there would be a consequent decline in investment, with associated impacts on infrastructure, employment and the skills pipeline (both financial, through training programmes, and the opportunity to learn on the job on the largest productions).
The Independent Film Tax Credit (IFTC) has the potential to address any unhelpful perceptions about the relationship between inward investment and domestic production by strengthening the incentive for closer collaboration on lower budget, US-financed projects that can boost the UK’s domestic L&D talent pipeline e.g. Pinewood Studios, long renowned for hosting some of the biggest inward investment projects, recently announced its new indie film hub. The IFTC also provides the opportunity for greater engagement with Europe, including more investment and co-production, as supported by the BFC’s strategic work with our European partners.
Recent changes to the tax relief system are positive steps towards securing greater UK-wide growth but require active ongoing support in order to maximise their benefits – not least because of the significant rise in international competition as other countries look to take business from the UK (see updated annex below).
The Industrial Strategy should ensure the UK’s fiscal incentives remain internationally competitive and that there is a robust and well-funded production support offer – including the British Film Commission and the BFI’s Certification Unit – to drive investment throughout the country.
While noting the welcome commitment in Invest 2035 to maintain “a stable and predictable tax environment”, Government may wish to explore with industry the role regional uplifts to the AVEC could play in further incentivising even greater production activity in the nations and regions, and – separately – also the potential growth opportunity for the whole of the UK provided by the significant rise in the global commissioning of unscripted content.
We welcome the recent AVEC enhancement for VFX which we believe will be a game-changer for this award-winning sector. However, traditional post-production work has also long been impacted by the 80% cap on qualifying expenditure as it sits at the end of the production cycle. It would therefore benefit from targeted support to ensure it is optimised to play a full part in the UK’s screen growth story.
We would caution against introducing any new barriers to investment that would be likely to make the UK less competitive internationally, including the imposition of any significant new financial obligations on international businesses looking to produce content here. In this way we can ensure a competitive advantage and avoid being drawn into a fragmented and complex landscape of financial obligations that are likely to make investment more challenging.
Close working between Westminster and the devolved administrations will be critical to the success of the Industrial Strategy and Sector Plans; to support a truly UK-wide agenda, the role of the BFC, working with national and regional partners, remains vital in ensuring the nations and regions are promoted to clients overseas who may otherwise automatically gravitate towards South East England.
UK studios have benefited significantly from the establishment of the BFC’s Stage Space Support & Development (SSSD) initiative in 2020, and such support is still required – not least because of the ongoing business rates issue and the £2 billion+ of viable projects remaining in the pipeline, particularly in the nations and regions, as well as Government-backed plans to encourage hub development in Sunderland/North East England.
Government should ensure that the business rates revaluation process going forward is robust and fit for purpose and does not unintentionally disincentivise private sector investment in priority growth sectors.
Artificial Intelligence (AI) offers three significant advantages as one tool in the filmmaker’s arsenal: increased efficiency, cost savings, and enhanced creativity. It may be said that the difference that AI currently makes is mostly about time and cost, but when combined with the UK’s proven natural excellence in creating original content with global appeal, the opportunity becomes a truly exciting one.
The UK’s screen industries have been very strong in capitalising on new digital technologies; enhanced R&D support – potentially tied to the green agenda – would enable businesses to seize even more of the opportunities being opened up by technological advancement, which now includes the rapid development of AI.
Successful Apprenticeship Levy reform is vital, through a framework provided by Skills England, ScreenSkills, BFI Skills Clusters and relevant partners, with apprenticeship models flexible enough to accommodate sector working patterns and allowing employers to maximise their use of levy funds; CPD for those already in the industry and bringing in ‘set ready’ people from outside the industry are also essential to meet demand and capitalise on the near-term opportunity.
The Codes of Practice for Creative Workers/Performers should be refreshed to reflect changes in industry practice and society in recent years, supporting both the domestic workforce and also international investment. Relatedly, the roll-out of e-visas as part of the new fully digital immigration system next year must not negatively impact our ‘film friendliness’ or act as a practical barrier to inward investment.
The ability to measure the success of Invest 2035 will be essential – Government support for regular development of the BFI’s Screen Business report would be welcome, as would access to improved data on both the UK’s global market share and regional spend activity.

Annex A: International Competition – Updated Summary

According to Olsberg SPI, as of October 2024, there are a record high number (120) of screen incentives available globally, with particular growth occurring in the US and Europe. Some recent examples of competitor activity, both in terms of studio space investment and new fiscal incentives, are as follows:

In Australia, the government nearly doubled its Location Offset For Inbound Production to 30% from July 2024. It also committed $233.5 million to the construction and delivery of Perth Film Studios. The facility will be open for productions from early 2026, with additional funding of $57 million approved to underpin operations and management.
In Ireland, the 2024 Budget increased the cap for qualifying expenditure under the Section 481 tax credit for film and television from €70 million to €125 million. Plans for 2025 include a version of the IFTC and a new 20% relief to capture the increasingly important unscripted content market.
Hungary has emerged as the second largest production hub behind the UK, capturing 835 million EUR (£700 million) in film production expenditure in 2023, a fourfold increase since 2018.
Abu Dhabi and Saudi Arabia are both now offering generous incentives to capture high value mobile production activity, with 35% and 40% rates respectively.
California recently doubled its annual tax incentive to $750 million in attempt to stop runaway productions to the UK and elsewhere. In Los Angeles, the development of Echelon Studios is moving forward – with five new soundstages over 500,000 sq. ft. in Hollywood; this is part of a wider growth in sound stage development in the state.
In Las Vegas, a proposed new state incentive programme has also spurred significant ‘shovel ready’ studio development proposals from both Warner Bros. Discovery (WBD) and Sony. The WBD project alone involves $900 million to build a new studio and a pledge of $500 million of production spending annually ($8.5 billion in total over 17 years).
In New Jersey, the legislature is moving forward on a significant expansion of a state incentive for film and TV infrastructure. That expansion is designed in part to help Netflix redevelop Fort Monmouth, a former military base on the Jersey Shore, as a 12-stage, 500,000 sq. ft. production facility.
A further significant new studio development in New Jersey received a $4.7 million state grant in April 2024. It’s part of a $1 billion, 10-acre redevelopment project, including a 1.2 million-square-foot film production complex called “Carteret Stages.”
Netflix announced in June 2024 that it had spent $900m on productions at its site in Albuquerque, New Mexico since 2019 – with more to come, and generous encouragement from the local government.
Canada is also continually improving its offer – for example, Winnipeg offers very generous incentives and studio space, plus benefits from being part of the US continent in terms of ease of travel and access.
In Spain, the government announced in 2022 a $1.9 billion investment plan to turn the country into a global screen production hub. Regional incentives are also becoming very impactful: introduced in 2023, new incentives in Northern Spain offer an up-to-60% tax deduction for national and international co-productions of film and TV projects.