TV and film producers in the UK are welcoming a new VFX tax credit increase, which the government confirmed as part of its budget yesterday. 

The tax credit will soon trigger a net rebate of 29.95%—up 5% from the current amount—and will be exempt from the Audio-Visual Expenditure Credit’s overall 80% cap on qualified spending. 

The government also moved up the credit’s implementation date from April 1 to January 1 next year. This means that spending incurred in the UK from the first day of 2025 will be eligible for the new incentive. Rebate claims can be made starting on April 1. 

These changes to the timeline should prevent productions from having to delay their spending in order to qualify. That’s especially helpful for VFX companies that are in need of work sooner rather than later as they attempt to recover from last year’s strikes and the overall production slowdown. 

VFX is one aspect of production that can easily move to another country, and this increased tax credit should reduce the number of companies that outsource their VFX work to regions with higher rebates.

The UK Screen Alliance, which has campaigned hard for a more competitive rate and for the cap to be removed on VFX spend, expects this increase to generate roughly US$227 million in domestic work (45% more than what the current credit brings in). The trade body also expects the larger credit to create 2,800 new jobs. 

“The confirmation in the budget that the VFX rebate will be available from the new year is terrific news for the UK’s visual effects companies,” said Neil Hatton, CEO of UK Screen Alliance. “We know that productions are making decisions right now on where to place their VFX work for 2025 and beyond.” 

Ahead of yesterday’s budget announcement, most British producers (69%) said they weren’t confident the budget would support the country’s media industry, according to a Percy & Warren survey. And while there isn’t much in it for producers, execs at multiple VFX Studios in the UK were quick to applaud the credit increase. 

“The film strikes have had a significant impact on our sector, so the implementation date being brought forward is a well-earned endorsement of the VFX sector’s importance to the UK future economy and our position as global leaders in creative tech,” said Antony Hunt, CEO of Cinesite Group, in a release issued by the UK Screen Alliance. “Significant growth will now be unlocked.”

William Sargent, chair of Framestore Company 3, also offered an opinion on the tax credit: “As the impact of emerging technologies continues to grow, it is more vital than ever that we future-proof the UK as a place where the best artists, technologists and creative thinkers can push the boundaries of what is possible—these changes will help them do just that.”