Giles Winn on the Autumn budget and what it means for the screen industry

To get a response to the Autumn budget and assess how the tax credits, insurance contributions and new studios will impact the screen industries we spoke to campaigns, communications and policy specialist Giles Winn. He takes a look at the key takeaways from the chancellor’s announcement and what it means for productions and their workforce in the coming years.

To read more from Giles, sign up to his Screen Power Substack, where he discusses screen issues and politics and where the two overlap.

The UK’s screen sectors are world class. We have some of the best broadcasters, production companies, film studios, animators, games designers, post-production houses and visual effects specialists in the world.

This is down to a complex chemistry of creativity, entrepreneurial flair, a passion for storytelling – and politics. From regulation and financial support, to debates around impartiality and the very existence of public service broadcasting, our political sphere is tightly interwoven with those sectors at the vanguard of our creative industries. What’s decided in Whitehall and Westminster can significantly impact our screen sector.

It’s for that reason that it’s important to play close attention to fiscal events – and our new Government’s first Budget on 30^th October was a great opportunity to get a sense of their direction of travel. 

There was good news – but some bad too. Let’s start with the positives:

• The VFX Tax Credit: The Government finally confirmed a new tax credit for Visual Special Effects (VFX) – that from 1^st April 2025, film and high-end TV productions will be able to claim an enhanced 39% rate of Audio-Visual Expenditure Credit on their UK visual effects costs.  This is great news - “terrific news” according to Neil Hatton who runs the VFX industry trade body UK Screen Alliance, and says it will generate hundreds of millions of pounds of value for the UK. It was originally announced under the previous government, but the consultation got caught up in the General Election. There’s been uncertainty around the new tax credit over recent months, so this clarity and confirmation is great news for the VFX sector – and film and HETV more broadly.
• Confirmation of the Independent Film Tax Credit: The Chancellor confirmed that the new Government fully backs the new tax credit (originally announced by the last Government) for UK films with budgets under £15 million and a UK lead writer or director. Eligible productions will be able to claim an enhanced 53% rate of Audio-Visual Expenditure Credit from 1^st April 2025.
• Sunderland Film Studios: The Chancellor used her speech to confirm £25 million funding for Crown Works Studios in Sunderland. This is a really exciting plan to build 20 sound stages in the heart of the North East, reinvigorating the region’s creative economy, supporting thousands of jobs, and creating the UK’s second major production hub. Again, this was announced by the previous government, but the confirmation and endorsement by the new Chancellor is very welcome.
• Creative careers advice: The Chancellor announced £3 million to expand the Creative Careers Programme, ‘giving school children the opportunity to learn more about career routes and directly engage with the workplace’.
• Creative Industrial Strategy: The Budget confirmed that the Creative Industries will be one of eight priority sectors for the Government as part of their upcoming Industrial Strategy. This is an important recognition of the growth potential of the creative and cultural sectors. There’s a consultation on this at the moment that ScreenSkills will be submitting a response to. The Government will publish its industrial strategy alongside the Spending Review in the Spring (exact timing TBC).

There was also some news that could have a negative impact on parts of the screen sector too.

• Minimum wage and National Insurance Contributions (NICs) increase: Notwithstanding some of the positives these measure could bring, they will undoubtedly have a negative impact on some small and medium sized businesses – of which there are lots in the screen sector. On top of a 6.7% increase in the minimum wage, business owners will now pay employer NICs on salary over £5,000, at a  higher rate of 15% (up from 13.8%).
• Take cinemas for example. Tim Richards, CEO of Vue Cinemas, described the tax hike as “significant” and that it caught him off guard. It’s worth saying that for small independent businesses, some of the impact will be offset by an increase in the Employment Allowance that allows small businesses to reduce their NICs liability by a certain amount each year – but where it does apply, the Institute for Fiscal Studies say the NICs increase will largely be borne by workers themselves.

So in summary, the Budget was a mixed bag for the screen sector. The VFX tax credit is undoubtedly positive, as is the recognition of the economic significance of the sector. But many of the measures were recycled from the previous Government, and some of the economy-wide measures will add pressure to businesses that are already feeling the pinch.