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HMRC internal manual

Film Production Company Manual

Qualifying films: intended theatrical release


For a film to qualify for Film Tax Relief (FTR) for a particular accounting period, it must be intended, at the end of that period, for theatrical release. If it is not so intended, then it cannot qualify for FTR for that or any subsequent accounting period (but any relief given for previous periods is not withdrawn).

‘Theatrical release’ means exhibition to the paying public at the commercial cinema.

‘Significant proportion of the earnings’

A film is not regarded as intended for theatrical release unless it is intended that a significant proportion of the earnings from the film should be obtained by such exhibition.

The phrase significant proportion is not statutorily defined; its level will depend on the facts in each case. But HMRC will accept that 5% of total estimated income is a significant proportion the earnings of a film.

Certification and intention for theatrical release

The fact that a film is certified as British does not affect whether it is intended for theatrical release. The Department for Culture, Media and Sport will certify films that are not so intended.

Overseas releases

A film may qualify as ‘intended for theatrical release’ even if the intention is to gain a significant proportion of the earnings from theatrical release abroad, rather than in the UK - although a British film would normally be expected to be intended for UK theatrical release.


The legislation does not specify whose ‘intention’ this should be. But at any time there will normally be someone entitled to determine how the film is to be exploited. This would generally be the person who commissioned it - if a company, the directors of that company - but there may be cases where someone else has a prior claim.

It is not necessary for the film to actually be released for showing to the public at the commercial cinema to meet this condition. However, if it was not so released, the question obviously arises of whether it was ever so intended (and if so, when the intention changed).

If there is any doubt about the intention, the following factors would count in favour of the film being intended for theatrical release:

  • a finance plan written on the basis that the film will be released theatrically;
  • a normal full-length or short feature film of a type commonly shown at cinemas;
  • production in a format suitable for theatrical showing at the commercial cinema;
  • payment to actors and other participants on terms in line with those prevailing for cinema films (rather than, for example, television work), and;
  • the relevant person can demonstrate, at the end of the relevant accounting period, the intention to seek a contract to present the film in the cinema.

A factor which would count against an intention for theatrical release is where there are no commercial cinemas which show the particular type of film.

Television Productions

Where the production is commissioned by a television company, or is clearly more suited to some distribution channel other than the cinema, these conditions may not be met. This will be the case even if the film is shown at a cinema. For example, even where episodes of a TV soap opera or of some other TV production were actually screened at a cinema prior to their transmission on television, the conditions would still not be met.