UK's 39.75% Independent Film Tax Credit Lures Hollywood, Challenging Atlanta's Production Dominance

London, UK – Hollywood productions are increasingly looking to the United Kingdom as a cost-effective and strategically advantageous filming location, with recent tax credit enhancements positioning it as a compelling alternative to established hubs like Atlanta. A recent social media post by Steve Faktor succinctly captured this trend, stating, "Hollywood" found a cheaper Atlanta — the UK.

The UK's appeal is significantly bolstered by its comprehensive tax relief system, notably the Audio Visual Expenditure Credit (AVEC) and the recently introduced Independent Film Tax Credit (IFTC). The AVEC offers a taxable credit of 34% for most films and TV programs, equivalent to a 25.5% net value. For children's TV and animated productions, this rises to a 39% gross rate, or 29.25% net. Crucially, the IFTC, effective from April 1, 2025, provides a substantial 53% gross rate, equating to a 39.75% net relief for independent films with budgets up to £15 million, applicable to expenditure incurred from April 1, 2024. Additionally, from April 2025, UK visual effects (VFX) costs on film and high-end TV productions will receive an enhanced net rate of 29.25%, with the 80% cap on qualifying expenditure removed for VFX.

Georgia, a long-standing favorite for film and TV, offers a competitive 20% base transferable tax credit, with an additional 10% available for productions that include a Georgia promotional logo, bringing the total to 30%. This incentive has transformed Atlanta into a major production hub, attracting numerous blockbuster films and series. However, recent legislative debates in Georgia regarding potential caps on the transferable tax credit have introduced a degree of uncertainty for large-scale productions.

The UK's consistent and uncapped incentive schemes, combined with its world-class infrastructure, skilled workforce, and diverse filming locations, present a formidable package. Major studios like Netflix, Amazon, and Disney have significantly expanded their presence in the UK, with facilities such as Pinewood, Shepperton, and Leavesden Studios operating at high capacity. The British Film Commission highlights that the UK's "transparent, inclusive and reliable production incentives" are a key factor in attracting global investment.

In 2022, the UK's film and high-end television production spend reached a record £6.27 billion, with US studios contributing a significant portion. This influx of production not only creates jobs and stimulates local economies but also enhances the UK's global soft power. The strategic decision by Hollywood to increasingly favor the UK reflects a calculated move towards maximizing financial efficiency and leveraging a mature, supportive production ecosystem.