UK's Media Landscape Advances with Extensive Government Incentives in Place
The UK government has unveiled a new Screen Economy Industrial Strategy, aiming to bolster the film, TV, animation, and visual effects (VFX) sectors. This strategy, announced in 2025, includes targeted tax incentives, funding, and infrastructure support to make the UK an attractive destination for screen economy businesses.
One of the key components of this strategy is the Independent Film Tax Credit (IFTC), designed to support smaller, independent film productions. Enhanced relief will be offered to make the UK more competitive for indie filmmakers.
Another important measure is the Audio-Visual Expenditure Credit (AVEC), which broadens the UK’s content incentives to cover a wider range of audio-visual media. This credit now yields up to a 39.75% net rebate for limited-budget films.
The Tentpole Production Bonus, aimed at attracting large-scale, high-budget productions, offers a 2% bonus for projects spending over $200M locally. This bonus aims to boost the UK’s position as a global production hub.
VFX reforms have been implemented to support the UK’s visual effects industry. From January 2025, VFX reforms will offer a 5% uplift and remove the 80% cap for domestic VFX spend, totaling a 39% credit.
Animation and children's TV production will also benefit from expanded and strengthened reliefs. These measures aim to safeguard and grow these well-established UK sectors, making them more financially viable.
Studio Infrastructure Support is another crucial part of the strategy. This investment and support aim to expand UK studio facilities and infrastructure to meet growing demand from domestic and international productions.
Cultural institutions like the National Theatre and permanent high-rate reliefs for live performance sectors are also receiving over £26M in investment. This funding is part of a larger cultural infrastructure investment aimed at enhancing the UK’s screen cultural infrastructure, including archives, museums, and institutions that preserve and promote the UK’s screen heritage.
These interlocking incentives represent a national industrial strategy for the screen economy. The UKGSF's export co-productions will benefit from a stronger downstream crew pipeline due to NFTS expansion. The merging of the Audio-Visual Expenditure Credit (AVEC) and the elevation of Animation and Children's TV Relief to the 39% AVEC rate, which now includes animated features, are further examples of this synergy.
These reforms collectively aim to stimulate private investment, protect culturally significant production, and build production capacity to meet the growing demand for UK-based screen content internationally. This strategy is part of the wider 10-year UK Industrial Strategy launched in June 2025, which emphasizes growth in sectors like creative industries and advanced manufacturing, supported by investments, skills development, and infrastructure upgrades to create a dynamic and sustainable economic future.
[1] Source: UK Government Press Release, 2025 [2] Source: Screen Daily, 2025
- The UK government's Screen Economy Industrial Strategy, unveiled in 2025, extends beyond film and TV to incorporate technology, with the Audio-Visual Expenditure Credit (AVEC) now applied to a wider range of audio-visual media, including animation, making the UK more attractive for business in these sectors.
- As part of the UK's broader 10-year Industrial Strategy, the government aims to stimulate private investment, protect culturally significant production, and boost production capacity in finance, business, and technology to create a dynamic and sustainable economic future, offering opportunities for growth in creative industries and advanced manufacturing.
