Source · Select Committees · Culture, Media and Sport Committee
Recommendation 18
18
Accepted
Government policymaking and implementation for tax incentives is too slow for global competitiveness
Conclusion
The Government is right to commit to maintaining the competitiveness of the UK’s tax incentives, and changes must be balanced with stability. Yet the production sector is much more agile than Government, and the time it took to reform expenditure credits for VFX shows that policymaking and implementation needs to be quicker to keep the UK’s tax incentives globally competitive. (Conclusion, Paragraph 74)
Government Response Summary
The government states it has already shown commitment to keeping AVEC competitive by providing additional support for independent films and introducing a 5% uplift for VFX costs from April 2025, and will continue to work with stakeholders.
Government Response
Accepted
HM Government
Accepted
The government has shown its commitment to keeping the UK’s Audio-Visual Expenditure Credit (AVEC) competitive by providing additional support for independent films at a rate of 53% and introducing a 5% uplift in relief for VFX costs as of 1 April 2025. We will continue to work with stakeholders to ensure the continued effectiveness of AVEC reliefs. The government regularly engages with the BFI and the British Film Commission on the competitiveness of the UK’s offer, and analysis of global incentives is produced regularly by Olsberg SPI.14 Government benchmarking global incentives every six months would be a disproportionate exercise, not least because what attracts film makers to the UK is much broader than just our competitive tax incentives, with government investment in infrastructure, funding to attract inward investment, and support for skills development also contributing to our overall competitiveness. There are a multitude of factors to consider when deciding on new tax reliefs beyond return on investment and sector impact, and the government is committed to ensuring that all public money is spent and targeted effectively across the full breadth of the creative industries and the economy. The Chancellor makes decisions on tax policy at fiscal events in the context of the wider public finances. One of the major attractions of the UK’s tax incentives, beyond their competitiveness, is the ease, simplicity and consistency of the process. The government therefore currently has no plans to introduce additional complexities on reporting spending across nations and regions. We do strongly agree with the Committee on the merits of having better data on regional spend, and government will engage with BFI and industry partners to better understand the feasibility of reporting regional spend on a voluntary basis.