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Committee makes recommendations on tax incentives, supporting workforce, independent cinemas and meeting challenges posed by AI.

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• Culture, Media and Sport Committee

Tax breaks and a streamer levy should be on the table as part of an urgent package of support for the UK’s crisis-hit high quality drama sector, MPs say today, in a wide-ranging report which urges the Government to step up the assistance it provides for all elements of British film and high-end television. 

Today’s report from the Culture, Media and Sport Committee welcomes the Government’s stated ambition to make the UK the best place to make film and high-end television, but warns that there must be no complacency over its status as a global production hub and calls for a regular assessment of tax incentives to maintain investment from overseas. 

At the same time, the report recommends a series of measures to halt the decline of domestic production of culturally distinct British film and programmes, which has failed to keep pace with the headline-grabbing growth of big box office productions financed and controlled from outside the UK.  

While the introduction last year of the Independent Film Tax Credit – as called for by the previous committee in the last Parliament – was a welcome first step for the film industry, the report says the Government should go further, or producers will continue to struggle to develop and raise finance for films, and those that are made will not be seen by audiences. The Committee calls for a tax credit to support the distribution of lower-budget films, among other measures to support independent film. 

The Committee further warns that without urgent intervention, the problems seen in independent film will extend to the domestic high-end TV sector, where competition from high-budget overseas production is driving up costs, revenue models are changing due to the terms offered by streamers and commissioning budgets of public service broadcasters are being squeezed by a fall in the licence fee and drop in advertising revenue.  

The report outlines evidence that this has put distinctly British content, which is vital to the UK’s identity, national conversations and talent pipeline, under threat.  

Evidence to the inquiry from ‘Wolf Hall’ director Peter Kosminsky warned that recent hit ‘The Mirror and the Light’ would not have been made today due to funding challenges, while ‘Black Doves’ and ‘Kaos’ producer Jane Featherstone told the Committee that the business models of streamers dictate that shows need to have global appeal to be made.  

The Committee’s report therefore calls for enhanced tax incentives for domestic high-end TV, and for streamers, such as Netflix, Amazon, Apple TV+ and Disney+, which benefit from the creativity of British producers, to put their money where their mouth is by committing to pay 5% of their UK subscriber revenue into a cultural fund to help finance drama with a specific interest to British audiences. 

The report also makes a range of recommendations on how to bolster skills and worker rights in the industry, citing the many hardworking and talented people who work in the sector as a key reason for its success. It reinforces the recommendation of the last committee for the Government to appoint a Freelancers’ Commissioner.  

On support for cinemas, the Committee says the Government should introduce a core funding model for culturally significant independent cinemas to mitigate the cost pressures, changing audience behaviours and under-investment in people and infrastructure that have threatened many communities' cinemas.  

The report also says that the Government should require licensing of creative works in all cases where they are used to train AI models. 

Chair comment

Dame Caroline Dinenage MP, Chair of the CMS Committee, said:   

“Big box-office blockbusters made in Britain have showcased the UK’s world-class film and high-end television industry like never before. But the boom in inward investment of recent years now risks crowding out our many talented independent British producers. While streamers like Netflix and Amazon have proved a valuable addition for the industry and economy, unless the Government urgently intervenes to rebalance the playing field, for every ‘Adolescence’ adding to the national conversation, there will be countless distinctly British stories that never make it to our screens. 

From independent production through to cinemas, all parts of our film and high-end TV sector, and the talented people that make it such a success, are going through a turbulent time. To neglect just one part puts the entire ecosystem at risk, so it’s therefore vital that the Government goes further and faster across the board to support an industry that is so important to both our economy and our soft power overseas. 

Today’s report sets out a way forward for the Government to put the name of the UK film and television industry up in lights around the world as the very best place to do business and to work, by offering the right tax incentives, tackling skills shortages, improving worker rights and making sure the rise of AI is a positive force, not a disincentive to investment.” 

Industry quotes on report 

Artificial intelligence 

Ed Newton-Rex, CEO, Fairly Trained: “The Committee is right to recommend the Government require AI developers to license any copyrighted works they wish to train on. Generative AI directly competes with the British creators who make the work it's trained on, so they must pay for this work.” 

Dr Mathilde Pavis, Legal and policy expert in AI, intellectual property, and data: “This is the first time British politicians have met the moment: deep, clear-eyed, and creative in its thinking on AI and the arts. For years, creative workers have called for thoughtful AI policy. This report finally answers with substance. We’ve moved beyond soundbites. This is rigorous, nuanced leadership—the kind our creative sectors deserve. This report isn’t a top-down tech directive. It’s a collective inquiry into what kind of AI future we want in the arts. The Committee did something rare in AI policy: it listened. Not just to tech companies, but to performers, producers, educators, archivists and creatives. By spotlighting real industry voices and risks, the report shows what genuine stakeholder engagement should look like. Thought leadership on AI isn’t about cheerleading technology. It’s about asking hard questions and delivering fair answers. This report does both.” 

Workforce 

Dame Helena Kennedy, Chair of the Creative Industries Independent Standards Authority (CIISA): “This report shows the Committee’s emphatic support for CIISA’s work to prevent and tackle bullying and harassment across the creative industries, including film and TV, and to provide the independent, industry-endorsed oversight that workers, whatever their role or employment status, deserve. We welcome the recommendation that all parts the creative industries under CIISA’s remit should support our work and provide funding to ensure we can deliver on our aims long term.” 

Jen Smith, CEO of CIISA: “CIISA has been developed with significant input from across the creative industries to address the current gap in our infrastructure to prevent and tackle bullying, harassment and discriminatory behaviour. There is an urgent need for a safe, independent, confidential place to raise concerns and seek professional impartial advice. We are very grateful to the CMS Select Committee for their on-going support and commitment to CIISA. Ensuring there is a sustainable funding mechanism to underpin CIISA will provide long term benefits to the whole of the industry.” 

Dominique Unsworth, CEO, Resource Productions: “Resource Productions CIC welcome the long-awaited publication of this report and especially support the recommendation to “…significantly increase the number of funded short film schemes in the nations and regions…delivered though BFI Skills Clusters by targeting funding to schemes giving the next generation of filmmakers the chance to develop their skills and professional reputations.” As the lead body for Screen Berkshire, we have seen first-hand through our pilot ‘Create and Credit’ programme - how sustained investment in shorts creates an inclusive, accessible pipeline for above and below the line talent at all stages of their careers. Shorts provide established crew with low-risk opportunities to step up or return to work, whilst enabling new entrants to gain the skills, contacts and credits they need to progress to feature and HETV.” 

Independent production 

Wolf Hall director Peter Kosminsky, Stonehenge Films: “I hugely welcome the fact that the CMS select committee has endorsed the call for a 5% levy on streamers' revenue to support public service broadcasting high-end television. This is a brave thing to do in the current political climate and absolutely the right solution. However, I do think it is important to stipulate that the fund created by this levy should only be available to productions which are either commissioned or co-commissioned by a public service broadcaster. As far as I can see, this isn't made clear in the report and it is an essential aspect of the 5% levy solution to the problems our industry faces.” 

Directors UK CEO, Andy Harrower: “Today’s report on British film and high-end television highlights the challenges facing the industry and the urgent need for action. In a global market, a strong UK production sector is crucial, but our public service broadcasters and independent filmmakers are under increasing pressure. Directors UK has long called for support, including better production funding, investment in skills, and improved freelancer rights. We're encouraged to see our recommendations reflected in the report — it’s now imperative that they are implemented by the government.”

British Screen Forum: “British Screen Forum welcomes the report’s focus on approaches that will encourage both inward and domestic investment in the screen sector. We particularly welcome the report’s recommendation to Government to review the impact of changes to guidance on EIS and SEIS schemes in a way which will enable greater access for screen sector businesses to the scheme and the call for Government to support a film distribution tax relief.”

Cinemas and distribution 

Catharine Des Forges, Director of the Independent Cinema Office said: “The Independent Cinema Office welcomes the report and the way that it recognises film exhibition and distribution as key strategic parts of the industry. We strongly back the report’s recommendations to provide organisational funding for independent cinemas alongside project funding, to provide tax relief for independent distribution, and for the government to look again at reducing VAT for entry to cultural venues. Each could have a major impact on the way independent cinemas can serve their audiences and communities. The Committee also recognised the urgent need for capital funding for independent cinemas that threatens the very survival of large numbers of independent cinemas and for others is a huge barrier for growth.” 

Andy Leyshon, Chief Executive, Film Distributors’ Association: “The CMS Inquiry has done a sterling job in getting to know and understand our industry. We are delighted that they have recognised the urgent need for a distribution P&A tax relief, an essential intervention that will benefit all parts of the film ecology and cinemagoing audiences alike. We have broad cross-sector support and have worked on the proposal for the last 18 months to ensure that it could be implemented as soon as possible. There is a real opportunity to turbo-charge UK independent film for future success, and we look forward to working with Government to act swiftly upon the Committee’s recommendation.” 

Clare Binns, Managing Director, Picturehouse Entertainment and Picturehouse Cinemas:“Picturehouse Entertainment is distributor of independent and UK film, and the proposed tax relief on P&A for distribution would be a huge help in sustaining a healthy industry that is currently still finding its feet after the disruption of COVID. The support could deliver a meaningful impact that would trickle down from production to distribution to cinema admissions and help the whole industry, which brings in vital money into the UK economy.” 

Eve Gabereau, Founder and Executive Chair, Modern Pictures: “As an independent distributor, we would welcome the presence of a 25% tax relief on P&A costs of film release campaigns. As outlined in the proposal, it would greatly support distribution and exhibition in the UK on a financial level, but more importantly for the sector as a whole, it conveys the cultural value and societal impact of cinema. It would also help reduce the financial risks associated with bringing films to market. The funding goes beyond economics and affirms the cultural significance of film on people and communities.” 

Katheryn Needham, CEO, Studiocanal UK: “STUDIOCANAL are committed to making crowd-pleasing British independent films, but marketing costs can be prohibitive to reaching wide audiences. Tax relief should be extended to print and advertising costs, so that films benefiting from the IFTC (Independent Film Tax Credit) can attract broader audiences, boosting both cultural impact and economic growth.” 

Llewellyn Radley, EVP International and UK Managing Director, Black Bear Pictures:“Distribution P&A Tax Relief for UK productions would be a hugely important step in revitalising the theatrical opportunity for local productions, and supporting UK talent, including new and emerging voices. It will allow distributors to deliver a broader range of films to our partners in exhibition, while appealing to underserved audiences with an appetite for more local stories. This would be a very meaningful measure that should have positive impact across the entire film ecosystem.” 

Marie-Claire Benson, EVP and Head of Motion Picture Group, Lionsgate UK: “The introduction of a 25% tax relief on P&A costs would be a transformative boost for the UK’s independent film sector. It’s a smart, targeted initiative that recognises the vital role distribution plays in the film industry’s ecosystem: connecting great British storytelling with audiences across the country. This proposal would strengthen the economics of releasing British films, have a positive long-term impact on UK film production, and widen access to more diverse, homegrown content — a win for audiences, exhibitors, and the broader creative economy.”  

Will Clarke, Chairman and Co-CEO, Altitude Media Group: “In a highly challenging market this tax incentive would be a breath of fresh air to UK distributors, allowing them much needed support to back films theatrically. Encouraging increased distribution investment and commitment would also greatly benefit cinemas and producers to grow the market for local productions.” 

Zygi Kamasa, CEO, True Brit Entertainment: “When releasing a British film in the UK, we are spending and competing in advertising terms with Blockbuster movies, games and other commercial retailers, who have many more millions of pounds in their budgets than independent film distributors. In order to ensure that those very films that are now being supported in production are adequately released, then a tax credit for P&A would be a huge boost to distributors and to those films to maximise their potential box office takings.” 

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