An independent new report published this month demonstrates the huge value of the government tax reliefs across the UK’s screen industries, seeding unprecedented levels of production, creating thousands of jobs, growing businesses and infrastructure, generating record levels of inward investment, boosting exports of UK productions and services internationally and creating spillover benefits for other industries.

The report reveals that an estimated £632 million in tax relief seeded £3.16 billion in direct production spend in 2016, a 17% increase on 2015.  UK-made productions generated £7.9 billion as the screen sector’s overall economic contribution (GVA), including £2 billion in tax revenues.  Production spend which would not take place without the tax reliefs, known as additionality, doubled GVA to £4.1 billion in 2016.

Screen Business: How tax incentives help power economic growth across the UK is a comprehensive analysis of the economic contribution of the tax reliefs for film, high-end television and, for the first time, analyses the new tax reliefs for video games, TV animation programmes and children’s TV programmes. The report uses the latest complete dataset available from 2016.

The report has been produced by analysts Olsberg SPI with Nordicity, and commissioned by the BFI, working with industry partners including the British Film Commission (BFC), Pact, Pinewood Group, UK Interactive (Ukie), the UK Screen Alliance and Animation UK.

• £1.72 billion from film production, a new record, 47% up from £1.16 billion in 2013
• £896.7 million from high-end television production, more than double from £414.9 million in 2013
• £389.9 million from video games development supported by tax relief, 70% up from £228.8 million in 2015
• £97.1 million from animation television programme production, 27% up from £76.2 million in 2013
• £61.0 million from children’s television programmes, the first year of tax relief
• Over 137,000 full-time equivalent jobs (FTEs) generated by tax-relief supported screen production in 2016
• Growth of screen industries outstripping wider economy – 71% increase in FTEs in film, high-end television and animation television production between 2013 and 2016; higher levels of labour productivity than the UK average
• Rapid growth of screen sectors generates over £850 million in capital investment in new production facilities right across the UK
• UK screen talent and technicians creating commercially and critically successful productions enjoyed by audiences worldwide

Expenditure on feature film production in the UK has doubled in nine years since the film tax relief was introduced, from £849 million in 2007 to a record-breaking £1.72 billion in 2016. High-end television production has also boomed since the introduction of the high-end tax relief in 2013, with expenditure more than doubling over the ensuing three years from £414.9 million to £896.7 million. The video games tax relief which came into effect in 2014 has supported £389.9 million of development expenditure in 2016, up from £228.8 million in 2015. The animation and children’s television tax reliefs have helped these smaller but culturally vital sectors develop ‘greenshoots’ and generate expenditure of £97.1 million and £61.0 million respectively.

Technology has had a seismic impact in driving structural change and innovation in screen production and distribution as well as audience consumption of film, TV and video games.

The rate of productivity (the amount of economic output, GVA, per FTE across the tax relief screen sectors) across the tax relief supported screen sectors at £75,600 per FTE is higher than for the average for UK economy as a whole (£62,144). Video games delivered the highest rate of labour productivity in 2016 at £83,800 and visual effects (VFX) also generated relatively high labour productivity at £81,300.

The tax reliefs play a crucial role supporting the UK’s competitiveness as a creative destination, attracting international inward investment production in the face of strong global competition. They have also helped lead to a repatriation of high-end TV productions which would otherwise have been made outside the UK.

Attracted to the UK’s world-class skills, facilities and diverse locations, film and high-end television production attracted £1.97 billion of inward investment and international co-production in 2016, including projects from the US, Europe and other markets in 2016; 76% of the total spend on film and high-end television production. Inward investment in UK film production reached £1.38 billion in 2016, the highest ever recorded and a 11% increase from £1.24 billion in 2015. High-end TV attracted £554.2 million of inward investment and international co-production expenditure in 2016, a 28% increase on £431.6 million in 2015. The total amount of inward investment and international co-production spend attracted by all five sectors was over £2 billion in 2016.

Tax relief supported production is also fuelling further private sector investment with more than £850 million identified spend on facilities across the UK since 2013 to service the growth in production. New and developing studio spaces include Wolf near Cardiff, Pentland in Scotland, Church Fenton in Yorkshire, Belfast’s Harbour Studios, Dagenham in London, Shepperton Studios, Longcross Studios, Elstree Studios and the Littlewoods building in Liverpool.

The strength of the UK video games sector has attracted over £1.75 billion of inward investment since the introduction of the VGTR, with creative hubs across the UK including Brighton, Cambridge, Cardiff, Guildford, Glasgow, Edinburgh, Dundee, Liverpool, London, Manchester, Oxford, Sheffield, Leeds, Nottingham and Warwick/Leamington Spa.

The full report is available at   www.bfi.org.uk/screenbusiness

In 2016, screen production supported by the tax reliefs generated £7.91 billion in GVA for the economy and 137,340 FTEs of employment in the UK. The employment and economic activity generated by screen production supported by the tax reliefs yielded £2.04 billion in tax revenue in 2016. Production activity across the tax relief sectors generated 48,330 direct and indirect FTEs of employment directly in production in 2016.

Over four years the tax reliefs have driven a 63% growth in production spend and a 62% increase in employment across film, high-end television and animation television programmes. The overall tax revenues across film, high-end TV and animation television programmes have grown by 67% from £1.11 billion in 2013 to £1.86 billion in 2016. All screen sector tax reliefs deliver a consistently growing return on investment through GVA.

Film, high-end TV and animation television programmes, the three sectors with the longest established tax reliefs, have grown their overall GVA contribution by 73%, from £4.19 billion in 2013 to £7.30 billion in 2016. Film was the largest contributor, generating £5.23 billion.

The growth in spend and investment within the UK screen infrastructure is stimulating further need for skilled people.  The BFI’s £19 million investment plan supported through the National Lottery, announced last year, is addressing the need for 10,000 new entrants to keep the UK in the vanguard of global film production over the next five years.

BBC: UK film and TV sees record investment

Financial Times: Tax relief fuels boom in Britain’s film and creative industries

Screendaily: UK tax reliefs powered a record £7.9bn production spend in one year, says report

The Hollywood Reporter: UK Tax Benefits Provide Record $10.3B Boost to Economy, BFI Report Show

Variety: U.K. Production Hits New Highs, Spurred by Tax Reliefs

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