HMRC provides seven tax reliefs on a company's (or production's) profits where certain criteria have been met. This means that the normal 19 percent rate of tax on profits (corporation tax) can be applied to less of the profits as more costs can be deducted under the terms of the special tax reliefs.
The BFI (British Film Institute) certify a production to qualify and tests include:
- The film will be released in cinemas or (if a tv production) broadcast.
- At least 10 percent of costs are from UK activities.
- The film was shot on or after January 2007.
- The tv production cost per hour is more than or equal to £1 million per hour and each broadcast slot is more than 30 minutes.
- The tv production is a comedy, drama or documentary.
Productions taking advantage of these reliefs can claim reduction in the amount of tax they pay - or in the case they make a loss - a tax credit payable to them.
Popular productions in 2017 included:
- Netflix, The Crown
- BBC, Sherlock
- Netflix, Game of Thrones
- BBC, Peaky Blinders
- BBC, Dr Who
- Warner Bros., Wonder Woman
- Artbees/Film4, T2 Trainspotting
- Syncopy/Warner Bros., Dunkirk
- StudioCanal, Paddington 2