Source · Select Committees · Culture, Media and Sport Committee
Recommendation 46
46
Not Addressed
Cinemas face insufficient variety and quality of films, not a lack of releases.
Conclusion
The problem facing cinemas is not that too few films are being released; it is that there is not enough variety and quality in the films that are reaching cinemas to tempt cinemagoers through the doors. The solution is therefore not simply more films, but better films with improved marketing. That should in part be addressed by Government through our recommendation for a distribution tax relief (paragraph 27), which will help to grow domestic demand for British films and enable cinemas to benefit from the Independent Film Tax Credit. (Conclusion, Paragraph 166)
Government Response Summary
The government highlights its commitment to AVEC competitiveness for independent films and VFX, and general considerations for new tax reliefs, but does not directly address the recommendation for a distribution tax relief.
Government Response
Not Addressed
HM Government
Not Addressed
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.