The UK is a leading hub for film and high-end TV (HETV) production, attracting significant investment from international studios and streaming platforms. As new technologies reshape the industry, policymakers and stakeholders are reassessing the balance between incentivising high-budget inward investment and supporting culturally distinct British content.
A recent report by a UK Parliamentary committee urges the government to consider additional measures for stabilising the UK’s independent film sector, including the possibility of a “streamer levy”, enhancements to existing tax credits and refinements to investor reliefs.
For media companies, particularly those with operations in the United States, this evolving policy landscape encompasses more than just domestic tax regimes. Ongoing talks between the UK and the US around tariffs, as well as the UK’s desire to remain an attractive destination for international productions, underscore the interplay between national cultural priorities and the broader global trade environment. Understanding how these developments could affect production timelines, financing and overall costs is crucial for businesses looking to navigate the UK market, expand existing operations or relocate HETV and film projects.
High-end TV and film in the UK
In April this year the UK's House of Commons Culture, Media and Sport Committee (Committee) published a report on the findings of its investigation into the British film and HETV industry. The Committee focused on how streaming platforms have reshaped both domestic and inward investment in HETV and reflected on an earlier inquiry that led directly to enhancements in the UK's tax incentives for visual effects (VFX) and independent British film productions.
While acknowledging the UK's success in attracting inward investment to this industry, the report raises concern over the increasing influence of digital sales to video-on-demand platforms on the development of British independent film and HETV. In particular, it notes that long-standing and successful independent production companies are closing down, citing an inability to secure sufficient funding and maintain typical commissioning arrangements. Prominent creative voices warn that funding challenges now threaten culturally British projects that may struggle to attract large global audiences but are crucial for preserving the UK's distinct creative output.
UK government views on a streamer levy
The report recommends the introduction of a 5% levy on subscription revenues on global streamers operating in the UK as a direct measure to support domestic HETV production. The Committee's rationale is that streaming platforms benefit from the UK's skilled workforce and industry infrastructure yet may not invest proportionately in domestically focused drama or local storytelling.
The report envisages that funds collected via the proposed levy would support the production of "high-end drama of specific interest to UK audiences, but which doesn't necessarily have cross-border appeal", therefore supplementing budgets for distinctly British content that might otherwise struggle to secure financing.
Responses to the proposal have been mixed. Some (for example COBA, The Association for Commercial Broadcasters and On-Demand Services) fear such a levy could deter foreign investment or prompt price hikes for consumers. Others believe that streamers' existing co-productions and licensing deals already support UK content, albeit insufficiently to cover domestic shortfalls. Talk of a tax has sparked concern among streaming companies with Netflix among those expressing concerns that such levies would lead to price increases, diminish competitiveness and penalise audiences.
Notwithstanding the report's recommendations, Sir Chris Bryant MP, the Minister for Creative Industries, Arts and Tourism in the Department for Culture, Media and Sport (DCMS), stated in his oral evidence to the Committee that the UK government does not "have any plans at the moment" to pursue a levy.
In further welcome news for global streaming operators, Lisa Nandy MP, the Secretary of State for Culture, Media and Sport, rejected proposals for such a levy in comments in the media and underlined the government's reluctance to impose additional financial burdens on streamers at a time when investment in British content is flourishing. Speaking at the inaugural World Audio Visual & Entertainment Summit (WAVES) in Mumbai, Nandy stated "We don’t want to do anything to deter that investment. We want to make the UK the most attractive place in the world to invest". Although Nandy's remarks were directed towards Britain's relationship with India, the underlying principles are applicable to US-UK relations. Despite the Committee's recommendation to implement the levy, Nandy remained resolute in her opposition at a time when "business is booming", citing Netflix's recent hit series "Adolescence" as a prime example of how streaming platforms are positively contributing to British content creation.
Enhancing existing UK tax credits and investor reliefs
The report also takes a broader look at the UK's existing and newly strengthened tax incentives for film and TV production, noting their positive impact on the industry's growth. Chief among these is Audio-Visual Expenditure Credits (AVEC), an 'above the line' payable tax credit that replaces former reliefs for expenditure incurred from 1 January 2024, providing rates ranging from 34% (basic) to 53% (enhanced) of qualifying UK core expenditure. These rates vary based on factors such as budget size and the presence of visual effects, and the most recent changes brought in by the Finance Act 2025, and augment relief for low-budget and VFX-intensive productions.
Additionally, the Committee proposed expanding the UK's Research and Development (R&D) tax relief regime, currently limited to science and technology, to include creative work. This measure would better align the UK with many countries operating under the Organisation for Economic Co-operation and Development’s (OECD's) definition of R&D, which recognises the value of R&D undertaken by the creative industries.
The report also draws attention to the barriers to private investment in film and HETV which the Committee considers warrant action. In 2017-2018 the UK introduced changes to the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) – both of which provide tax reliefs to encourage investment in small, innovative, or early-stage businesses – and introduced the 'risk to capital' test. This test is intended to ensure that such schemes are focused on genuinely early-stage ventures with growth potential. It has two components: (a) the investee company must have long-term growth objectives; and (b) the investment must carry a genuine risk of loss exceeding any potential return (including tax relief).
Several stakeholders told the Committee that this test has reduced EIS/SEIS reliefs' effectiveness for financing early-stage independent film, thereby discouraging equity investors. Although HMRC updated its guidance in 2021 to clarify the test (and how it will be applied), the Committee believes more is needed. It recommends that the government review the impact of these legislative changes on film financing and report its findings within six months to ensure producers can fully access available funding.
Tariffs and the global tax landscape
The debate around taxing the creative industries, including a potential streamer levy, cannot be separated from the global backdrop of tariff negotiations, cross-border taxing rights and trade discussions currently underway between the UK and the United States. Since taking office, President Trump has instituted a range of tariffs that notably affect media businesses, including a 10% baseline tariff on UK imports (services excluded) and a proposed 100% tariff on foreign-made films entering the US market.
In response, the government is in active negotiations with US officials to mitigate these measures and safeguard its industries. Efforts to reduce tariffs and clarify transatlantic taxing rights make the introduction of any new domestic charge more sensitive. Many commentators predict that, rather than pursuing additional taxes, the UK may ease or eliminate certain taxes, such as the digital services tax, to secure favourable concessions in future trade agreements with the US.
Against this backdrop, a new streamer levy appears all the more unlikely, which is welcome news for non-UK media companies wary of additional financial burdens. However, ongoing global negotiations and shifting domestic priorities mean the situation remains unsettled and industry stakeholders would be prudent to monitor any developments closely.
