Latest Economic Contribution report highlights success of Creative Sector Tax Reliefs

A major new report released this week has underlined the importance of the Creative Sector Tax Reliefs to the UK’s production industry and wider economy.

Olsberg SPI and Nordicity’s The Economic Contribution of the UK’s Film, High-end TV, Video Games and Animation Programme Sectors report, commissioned by the BFC, BFI, Ukie, Pact and Pinewood, details the impact of the Film, High-end Television, Animation and Video Games Tax Reliefs on the economy, infrastructure and job creation.

A key focus of the study is the Film Tax Relief, originally introduced in 2007, and it’s hugely beneficial impact on filmmaking within the UK. The report highlights that for every pound of Film Tax Relief paid out, £12.49 is generated, with film production spend in the UK averaging £1.136 billion annually since 2007. The report also estimates that, if the Film Tax Relief were abolished, annual UK film production spend would fall by c. £550 million.

The report goes onto detail how the upturn in production brought about by the Film Tax relief has led to a surge in investment in film infrastructure, with major companies including Warner Bros. and ILM choosing to set up bases in the UK. There has also been a hugely positive effect on employment, with the film industry now generating 39,800 direct jobs in the UK.

For the first time, the biennial report also details the effects of the High-End Television Tax Relief, first introduced in 2013, and again, is quick to emphasise the positive effect of the initiative. The tax relief has brought about rapid growth in high-end television production, with production spend increasing in its first full year from £50 million to £395 million, 57% of which being generated by internationally financed productions, such as Game of Thrones (HBO) and 24: Live Another Day (Twentieth Century Fox Television).

Again the report emphasises the wider impact of the High-End Television Tax Relief, estimating that it generated 16,800 full-time equivalent jobs in 2013, as well as £852 million in additional gross value. The TV Relief has had an impact on infrastructure too with Bristol’s The Bottle Yard studio and Belfast’s Titanic Studios demonstrating the hugely positive effect on production levels throughout the UK’s regions and nations. Nowhere has this been demonstrated more clearly than in Scotland:

  • Major Sony Television series Outlander (Starz/Sony Television/Left Bank) filmed for around 38 weeks throughout 2013-2014.  Investment is estimated to account for around £20m in Scotland across that period. The production spend in Scotland for 2013 was the highest ever at just over £33m, and it is estimated that spend was over £40m for 2014.
  • Job creation: Outlander commissioned a crew of approximately 300 across props, filming and set build and over 2,000 supporting artist roles cast from within Scotland and the rest of the UK. The production provided work for Scotland’s freelance crews and work for production services and facilities companies. The industry has proven able to crew up to five productions at the same time as Outlander, showcasing the strength of the country’s crew base.
  • Outlander worked with Creative Skillset to develop skills and training opportunities, and Creative Scotland report that the production took on 37 trainees in a variety of positions on the crew.
  • The production company built a dedicated television studio and production base in Cumbernauld near Glasgow. This development helps to strengthen the infrastructure of provision in Scotland.
  • Outlander is broadcast on the Starz network in the US which provides a great platform for the promotion of Scottish locations, scenery and talent.

The Creative Sector Tax Reliefs are just one aspect of UK production on which the BFC is able to provide expert advice, with our UK and LA offices offering international projects tailored guidance and support throughout the production process.

Speaking about the report’s findings, Culture Secretary Sajid Javid said: “The UK’s film, TV and video games industries are amongst our nation’s biggest success stories. When you look at Star Wars: Episode VII being filmed at Pinewood, the global popularity of Downton Abbey and the phenomenal success of Rocksteady’s Batman Arkham video game series, it’s clear the sector is only getting stronger. This report highlights how they’re each a powerful driver of growth and the incredible impact our creative industries are having on our economy.”

Adrian Wootton, Chief Executive of the British Film Commission and Film London, added: “This report, alongside record-breaking production statistics for 2014 and success at the Oscars, yet again confirms the UK screen industries are generating billions for the economy and are vital in terms of job creation. A creative powerhouse, our industry is able to successfully compete on a global stage, thanks to a combination of attractive tax incentives alongside world-class infrastructure, talent and crew. I am proud of the British Film Commission’s role in contributing to these successful figures, and I look forward to continuing to work with our government and industry partners to ensure our screen industries thrive and deliver for the UK economy.”