Finance (No. 2) Act 2024

14 Additional relief for low-budget films with specified UK connection U.K.

(1) Chapter 4 of Part 14A of CTA 2009 (application of expenditure credit etc to films and television programmes) is amended as follows.

(2) After section 1179DJ insert—

“1179DJA Films: certification as low-budget film

(1) Where a certificate is granted in relation to a film under Schedule 1 to the Films Act 1985, if—

(a) the application for the certificate specifies that it is an application for a low-budget certificate, and

(b) the Secretary of State is satisfied that the budget condition and the creative connection condition are met,

the certificate must (in addition to certifying that the film is or will be a British film) certify the film as a low-budget film.

(2) The budget condition is a condition, to be set out in regulations, requiring specified expenditure incurred, or currently or previously anticipated to be incurred, in relation to the film not to exceed a specified amount.

(3) The creative connection condition is—

(a) in the case of an interim certificate, that the film, if completed in accordance with the proposals set out in the application, will satisfy subsection (4);

(b) in the case of a final certificate, that the film satisfies subsection (4).

(4) A film satisfies this subsection if—

(a) the director or scriptwriter of the film, or any other person working on the film in a specified role, is a British citizen or is ordinarily resident in the United Kingdom, or

(b) the film is a qualifying co-production.

(5) Regulations may—

(a) provide for the budget condition to be different in relation to interim certification and final certification;

(b) modify the test in subsection (4)(a) in relation to films that have more than one director or scriptwriter or person working in a role specified under that provision;

(c) prescribe the particulars and evidence necessary for satisfying the Secretary of State that the budget condition or the creative connection condition is met.

(6) The reference in paragraph 9(1) of Schedule 1 to the Films Act 1985 (right to apply to court) to a decision under paragraph 3 of that Schedule includes a decision under subsection (1).

(7) A low-budget certificate may not be granted in relation to a film if another certificate under Schedule 1 to the Films Act 1985 or a certificate under section 1179DM has effect in relation to the film; and vice versa.

(8) A low-budget certificate may be surrendered by the production company; and a surrendered certificate ceases to have effect in respect of all accounting periods.

(9) A film is a “certified low-budget film” in relation to an accounting period if a low-budget certificate has effect in relation to it at the end of the period.

(10) In this section—

• “low-budget certificate” means a certificate granted in accordance with subsection (1);

• “regulations” means regulations made by the Secretary of State with the approval of the Treasury;

• “specified” means specified in regulations.”

(3) In section 1179DN (disclosure of information for certification purposes), in subsection (1)(b), for “1179DK” substitute “1179DJA”.

(4) In section 1179DR (qualifying expenditure)—

(a) the existing text becomes subsection (1);

(b) after that subsection insert—

“(2) But for the purposes of step 1 in section 1179CA(1) as it applies in relation to a certified low-budget film (see section 1179DJA(9))—

(a) no more than £15 million can count towards the total of the production company’s relevant global expenditure, and

(b) UK expenditure counts towards that total before other expenditure.”

(5) In section 1179DV (rate of credit)—

(a) in subsection (2)(a), after “animation” insert “or a certified low-budget film”;

(b) in subsection (3)(a), after “animation” insert “but is not a certified low-budget film”;

(c) after subsection (5) insert—

“(5A) In the case of a qualifying film that is a certified low-budget film (see section 1179DJA(9)), the relevant percentage is 53%.”;

(d) in subsection (6), for “or (5)” substitute “, (5) or (5A)”.