A brand new impartial report Display Enterprise, revealed in the present day by the BFI, reveals the very best ever return on funding to the UK financial system of £13.48bn (GVA) from the UK Authorities’s display screen tax reliefs from 2017-2019.
The triennial report reveals the tax reliefs generated record-breaking ranges of manufacturing and jobs; grew native companies and infrastructure growth throughout the UK’s nations and England’s areas; attracted file ranges of inward funding; boosted exports of UK productions and companies internationally; and created wider financial advantages for different industries, together with tourism and retail.
The report underlines how the energy and resilience of the display screen industries pre-pandemic has enabled the manufacturing sector to bounce again so successfully and turn out to be one of many UK’s strongest booming industries with £4.7bn manufacturing spend on movie and high-end tv alone from January to September 2021.
Over the three yr interval of the report, direct spend on display screen manufacturing within the UK has elevated by 74% between 2017 and 2019 to succeed in £13.86 billion (£7.94 billion, 2014-2016).
Display Enterprise analyses movie and TV manufacturing and video video games improvement spend over the most recent three-year interval of full information, 2017-2019. The report reveals that an estimated £1.02 million in tax reduction seeded £5.11 billion in direct manufacturing spend in 2019, a 61% improve on 2016, and led to a further £6.43 billion in GVA for the UK financial system. UK-made productions generated £13.48 billion in general GVA, a 23.7% improve between 2017and 2019.
This GVA yielded £3.60 billion in tax revenues for the Exchequer in 2019, a 27% improve since 2017. Manufacturing spend on movie, high-end, youngsters’s tv and animation which might not happen with out the tax reliefs, often called additionality, was price £6.14 billion in 2019.
Direct spend on manufacturing generated file £5.11 billion in 2019 throughout all display screen sectors, up from £4.31 billion in 2017:
– £2.08 billion from high-end TV manufacturing (HETV), a 70% improve on 2017;
– £2.02 billion from movie manufacturing; spend constantly exceeding £2 billion a yr
– £860.4 million (est.) from video video games improvement supported by tax reduction, 23% up from £700.8 million (est.) in 2017
– £86.0 million from youngsters’s TV programme manufacturing, a 16% improve on 2017
– £65.3 million from animation programme manufacturing, a 27% lower on 2017
– inward funding and co-production spend for movie, high-end TV, animation and kids’s programmes is driving increase with £3.45 billion in 2019, 81% of whole spend
Display Enterprise: How tax incentives energy financial development throughout the UK is a complete evaluation of the financial contribution of the tax reliefs for movie, high-end tv video video games, TV animation programmes and kids’s TV programmes. The report makes use of the most recent full dataset out there from 2017-2019.
The report has been produced by the worldwide consultancy Olsberg SPI with Nordicity and commissioned by the BFI, supported by trade companions together with the British Movie Fee (BFC), Pact, Pinewood Group, TIGA, Ukie, the UK Display Alliance and Animation UK. The evaluation is in keeping with the 2018 version of Display Enterprise and applies HM Treasury Inexperienced E book rules and finest follow financial modelling to precisely estimated the influence of those vital revenue-generating tax reliefs for the financial system. 2019 is the most recent yr that full information may be offered to calculate and analyse the whole financial contribution of the display screen sectors.
Chancellor Rishi Sunak mentioned: “The UK is residence to a few of the finest inventive expertise on the planet, and our TV and movie trade is a jewel in our crown, driving a whole bunch of 1000’s of jobs and billions for the financial system.
We’ve ensured the sector has had our assist all through the pandemic, with the furlough and self-employment schemes, and the £500 million Movie and TV manufacturing Restart Scheme is now serving to productions get again up and working.
We proceed to assist the inventive sector – our tax reliefs make the UK a gorgeous place to movie and are driving a wave of personal funding, and our Plan for Jobs helps extra folks to enter the trade via apprenticeships, traineeships and the Kickstart scheme.”
Ben Roberts, BFI Chief Govt mentioned: “We work with trade and Authorities to construct the UK display screen sector, and Display Enterprise is proof of the energy of the tax reliefs and the way they’ve supported a staggering stage of manufacturing and jobs, and constructed enterprise throughout the UK’s nations and areas.
It’s a testomony to this energy that our display screen industries have bounced again quicker than virtually another trade submit pandemic. As we glance to the long run we have to make sure that we keep on prime of our sport – by constructing the expert workforce this stage of manufacturing critically wants and growing funding in areas throughout the UK the place there are alternatives for development and innovation.”
John McVay OBE, Pact CEO, mentioned: “The report as soon as once more reveals the worth of the TV and movie tax reliefs to the UK financial system, bringing enormous inward funding to the UK, creating jobs and enabling small companies throughout the UK to develop. The energy of the UK’s TV and movie infrastructure – together with the Authorities’s Manufacturing Restart Scheme – has enabled producers to get again into manufacturing rapidly to attempt to recoup the £450 million in misplaced revenues because of the pandemic. With staying in turning into the brand new going out over the previous 18 months, by no means earlier than has the UK’s standing as a world chief in TV and movie been extra obvious.”
Adrian Wootton, CEO of the British Movie Fee and Movie London, mentioned: “This report offers the excellent proof, which we now have skilled over the previous couple of years, that there’s an unprecedented increase within the recognition of this nation – all through our nations and areas – to make content material for international audiences. We’ve got launched into a brand new Golden Age for movie and TV, one that gives unrivalled alternatives for our trade, our financial system and our communities to stimulate long- time period job creation and prosperity for the entire of UK.
“It’s extra vital than ever that we proceed to concentrate on, make investments and construct the extra stage area, and abilities base, proper throughout our nations and areas. That can enable each nook of the UK to profit from the brand new jobs and funding, and to share within the persevering with success of one in every of our financial system’s excellent news tales.”
Andrew M Smith, Company Affairs Director, Pinewood Group mentioned: “As we speak’s report places the info behind the UK’s success in delivering world-class movies, tv and video video games because of our extremely expert workforce, state-of-the-art amenities and monetary incentives. Pinewood’s elevated funding in new and expanded manufacturing amenities and coaching programmes underlines our confidence within the UK as a number one participant on this international trade and the alternatives we now have for additional development and success.”
Neil Hatton, Chief Govt, UK Display Alliance, mentioned: “This report underlines the energy of the UK’s VFX trade and reveals regular development over the three years previous to the pandemic. From proof exterior this report, we all know that there’s a enormous alternative for the UK to seize a higher share of the worldwide VFX market and create many new jobs within the UK which have excessive ranges of ability and productiveness. Display Enterprise offers us with a springboard for conversations with authorities geared toward unlocking this appreciable potential for additional development.
Dr Jo Twist OBE, CEO of Ukie, mentioned: “The most recent Display Enterprise report demonstrates the wholesome development of the UK’s video video games and interactive leisure ecosystem, one which is supporting jobs and contributing considerably to the financial system proper throughout the nation. Insurance policies similar to Video Video games Tax Aid have performed an immensely vital position in supporting our thriving sector, which is a vital a part of the inventive financial system. We look ahead to working with Authorities to determine methods to proceed to strengthen the ecosystem to create extra jobs on this extremely modern and artistic sector.”
Kate O’Connor, Govt Chair-Animation UK, mentioned: “The UK’s animation sector is internationally famend for its creativity, character improvement and storytelling. The introduction of the Animation Tax Aid had a dramatic influence on manufacturing spend, nevertheless, the interval lined by this report reveals for the primary time a reported decline. The larger image is extra revealing, as a result of while manufacturing spend on animation for TV and on-line dipped, it elevated considerably for animation movies from £80m to £520.4m, which displays growth out there for animated content material general. We’re decided that the UK sector grows its market share and can have a look at components on this interval, together with the more and more aggressive provides from different nations. There isn’t a doubt that tax reliefs, as a fiscal lever, set off development.”
SCREEN BUSINESS REPORT FINDINGS IN DETAIL
UK HETV manufacturing now delivers the very best spend (40.7%) throughout the UK display screen sectors, recording £2.08 billion in 2019, greater than 5 instances its spend of £392.8 million in 2013, the yr the tax reduction was launched.
Expenditure on characteristic movie manufacturing within the UK has constantly topped £2 billion for 3 years and has greater than doubled within the 12 years because the movie tax reduction was launched, from £849.2 million in 2007 to £2.02 billion in 2019.
The video video games tax reduction, which got here into impact in 2014, supported an estimated £860.4 million of improvement expenditure in 2019, a 22.8% improve from £700.8 million in 2017.
The youngsters’s tv and animation tax reliefs have helped these sectors develop and generate expenditure of £86.0 million and £65.3 million respectively. Animation work can also be included into characteristic movies, high-end tv and kids’s programmes supported by different display screen sector tax reliefs and due to this fact additionally contributes to the spend and GVA for these reliefs.
The UK’s VFX sector is main contributor to the display screen sector’s development. Direct spend on VFX throughout all tax reduction manufacturing is estimated to have been £363.5 million in 2019, a 32% improve on £239.8 million in 2016. The general financial contribution throughout the display screen sector worth chain attributable to VFX was £891.0 million in 2019. Over the three years of the report the full VFX GVA is £3.18 billion.
Studio growth and funding
The expansion in movie and tv manufacturing exercise and expenditure has attracted funding from personal and public buyers into the sector’s manufacturing infrastructure, specific studio developments. While funding in movie and TV studios has been primarily centred on the Metro London cluster, latest years have seen planning, improvement and funding in all UK nations and in a number of of England’s areas. The report particulars an estimated £131.6m spent on constructing or increasing UK studios between 2017 and 2019 – additionally offering jobs for different industries – and an additional £785.4 million for developments which had acquired planning permission by the top of 2020.
Because the 2018 version of Display Enterprise, new studios have opened UK-wide together with Wolf Studios in Wales, First Stage in Scotland, Belfast Harbour Studios in Northern Eire and The Depot in England. Deliberate investments for additional studio growth together with Eastbrook Studios (East London), Pinewood and Shepperton and Sky Studios, Elstree.
A big quantity of HETV manufacturing takes place within the UK nations and England’s areas, with an estimated £1.56 billion in manufacturing spend, or round 33% of the UK whole, being undertaken exterior of Metro London between 2017–2019.
In 2019, HETV spend generated 33,548 FTE jobs in Metro London and 15,612 all through the remainder of the UK. Taking into account the broader impacts of the HETV content material worth chain, 45,240 FTE jobs have been created in Metro London in 2019 and 19,070 all through the remainder of the UK.
HETV spend generated £1.67 billion in GVA in Metro London in 2019 and £778.3 million all through the remainder of the UK. The full influence of the HETV content material worth chain generated £2.64 billion in GVA in Metro London in 2019 and £1.04 billion all through the remainder of the UK.
Movie manufacturing has additionally been extra targeted round Metro London which has a highly-developed base of specialist amenities and companies. Nevertheless, the report reveals important impacts throughout the UK, with round £1.18 billion spent exterior Metro London over 2017-2019. This represents round 19% of the full.
In 2019, this spend generated 37,685 FTE jobs in Metro London and seven,775 FTEs all through the remainder of the UK. When the broader impacts of the movie content material worth chain are considered, 49,845 FTE jobs have been created in Metro London in 2019 and 19,085 all through the remainder of the UK.
Movie spend generated £1.96 billion in GVA in Metro London in 2019 and £404.1 million all through the remainder of the UK. The broader whole influence reveals that £3.74 billion in GVA was generated in Metro London in 2019 and £1.24 billion all through the remainder of the UK.
GLOBAL COMPARISON OF PRODUCTION INCENTIVES
In 2019, international expenditure on characteristic movie and tv manufacturing – ie funding in scripted movie and tv and documentaries, however not sport, information or commercials – was estimated to have reached $177 billion. Consequently, the display screen sector is a robust financial driver – notably in jurisdictions, such because the UK, which have a highly-developed improvement and manufacturing provide and a steady incentives base.
The UK display screen sector tax reliefs are amongst round 100 computerized incentives on provide world wide. Display Enterprise offers a technical overview of a spread of world incentives together with these in established European Union (EU) markets, together with France and Germany; incentives with modern approaches to attracting longer-term infrastructure funding; and incentives with notably enticing headline incentive charges. It additionally notes incentives for video video games improvement and VFX exercise.
Knowledge evaluation within the Display Enterprise report has been performed in keeping with HMT ‘Inexperienced E book’ methodology and focuses particularly on manufacturing exercise generated in these sectors supported by tax reliefs, quite than the full worth of all. It due to this fact excludes non-UK content material produced, distributed, bought, considered or exhibited within the UK.
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