Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss clause 15 stand part.

Clauses 14 and 15 make changes to better support the UK independent film industry. That is in recognition of the sector’s cultural importance and its role in growing and supporting UK talent. The Government have heard from several representatives of the British film industry, including the British Film Institute, about the specific challenges that the independent film industry faces. The Government also recognise the vital role that independent film plays in incubating UK talent.

The changes made by clauses 14 and 15 substantially increase the level of audio-visual expenditure credit available to smaller budget films from 34% to 53%. This increased rate for qualifying films is referred to as the UK independent film tax credit. The 53% tax credit will be applied on up to 80% of a film’s production costs, up to a cap of about £15 million. That translates into £31.80 back for every £100 spent, after accounting for corporation tax at 25%.

Films will also need to meet the criteria of a new British Film Institute test, with the expectation that films will have either a UK writer, a UK director or be certified as an official co-production. Clauses 14 to 15 set out the bulk of the measure, but further detail, including on the additional test, will be provided in a statutory instrument in due course.

Productions that start principal photography from 1 April 2024 will be eligible, and companies will be able to make claims from 1 April 2025 on expenditure incurred from 1 April 2024. The UK independent film tax credit is a transformational, generous, enhanced tax credit, which will boost the production of UK independent films and incubate UK film talent.

As we have heard from the Minister, clause 14 introduces a higher rate of expenditure credit for independent films, defined as films below a maximum budget that have either a UK director or writer, or are an official international co-production. As the Government’s policy paper on this measure makes clear, the basic rate of credit under the audio-visual expenditure credit scheme is 34%. Independent films will now receive a rate of 53%, with the amount of credit capped to relevant global expenditure of £15 million. The Opposition strongly support the UK’s creative sector as one of the areas of the global economy in which Britain is world leading. As such, we will not oppose any measures that provide certainty and greater opportunities for growth in that critical sector.

Clause 15 provides the administrative framework for the previous clause and sets out that the higher rate will be available only on expenditure incurred from 1 April for films that commenced principal photography on or after that date. We understand that claims can in turn be made from 1 April 2025, so I would like to ask the Minister about the role of His Majesty’s Revenue and Customs, because we know that the new schemes will need to be properly explained through new guidance and may require new staff, as the Government’s policy paper makes clear. What is HMRC doing to ensure that the guidance remains timely and up to date for those wanting to make a claim? What will HMRC do to support those who want to apply for the credit so that they can understand how it operates? Similarly, what allocation of staff will be made to administer the measure?

I thank the Opposition for their support. I think there is agreement across the House on the vital role of the world-leading UK creative industries, and, in particular, our thriving film sector. In answer to the broad question put by the hon. Member for Ealing North, further information will provided by a statutory instrument that we will discuss in due course. His Majesty’s Revenue and Customs will have a role in that, and the precise resource allocation is an operational decision for it. As the Minister who oversees HMRC, I will pay close attention to the issue and I will ensure that it is properly resourced. This is a very important policy area and we want to ensure that it is successful. Again, I am afraid that I will ask the hon. Gentleman to be a little patient and wait for the details in the statutory instrument, but we are consulting key stakeholders on that.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

Clause 15 ordered to stand part of the Bill.