The Impact of the Screen Sector Tax Relief on Wales

In December 2021, the British Film Institute (BFI) published its latest Screen Business report (Screen Report), analysing how the tax relief granted to the screen sector in the UK affected stakeholders and the economy in 2019. The BFI Screen Report features granular and specific data for UK nations: the purpose of this report is to provide a summary of the most important data relating to Wales. Our summary also provides a comparison with the rest of the UK, focusing on two sectors: high-end television (HETV) and filmmaking.

UK film tax relief was established in 2007 to attract and incentivise film production in the UK. Tax relief announced in 2013 and 2014 offer the same benefits to HETV, animation for broadcast and video games. The BFI Certification Unit is the first point of contact for applicants wanting to qualify for this tax relief.

These forms of tax relief enable a production company with an eligible project to claim back 25% of qualifying expenditure. All relief is capped at 80% of the total production budget. These financial incentives are designed to have spillover effects in the nations and regions where production takes place, with a significant impact on local economies.

Our analysis of the data published by BFI shows that in Wales, HETV and film tax relief has had a considerable economic impact. When compared to the rest of the UK, the HETV and filmmaking sectors in Wales play a leading role, both in spending efficiency and in relative Gross Value Added (GVA) outcomes. Key findings include:

• Welsh companies’ spending as a result of the tax relief on filmmaking resulted in a nine-fold return in terms of GVA in 2019.
• For every additional employee in Welsh HETV, £59,000 in additional GVA was generated by tax relief across the value chain. The GVA figure for Wales is the second highest of 12 nations and regions in the UK (the UK average is roughly £57,000).
• Every £100,000 in tax relief enables the Welsh filmmaking sector to employ 14 additional full-time employees – a ratio that is the second highest of 12 nations and regions in the UK.
• Every £1 spent in film production due to film tax relief (FTR) generated an £8.8 return in terms of GVA on the film production value chain in Wales – significantly higher than the UK average return of £2.5. The figure for Wales is the second highest of 12 nations and regions in the UK.
• For HETV tax relief, each additional £1 spent in Wales generated £1.5 in terms of GVA across the HETV value chain. This is slightly below the UK average of £1.8.

Find the full BFI Screen Report via: https://www.bfi.org.uk/industry-data-insights/reports/uk-screen-sector-economy