Business rates: Film studio relief - local authority guidance
This guidance is to support local authorities in administering the film studios business rates relief.
Applies to England
About this guidance
1. This guidance is intended to support local authorities in administering the film studios business rates relief, announced at the Budget on 6 March 2024. This guidance applies to England only.
2. This guidance sets out the criteria for the film studio business rates relief scheme. The guidance does not replace existing legislation.
3. Enquiries on this measure should be addressed to: ndr@communities.gov.uk.
Introduction
4. At the Budget on 6 March, the Chancellor announced that eligible film studios in England will receive a 40% reduction on gross business rates bills until 2034. The relief once implemented will be backdated to 1 April 2024. This is a tax cut worth around £470 million over 10 years.
5. This document provides guidance to authorities about the operation and delivery of the policy.
How will the relief be provided?
6. The government will, in line with the eligibility criteria set out in this guidance, reimburse local authorities that use their discretionary relief powers under section 47 of the Local Government Finance Act 1988 (as amended) to grant relief. It will be for individual local billing authorities to adopt a local scheme and determine in each individual case when, having regard to this guidance, to grant relief under section 47.
7. The government will fully reimburse billing authorities and major precepting authorities for their loss of income under the rates retention scheme as a result of awarding the relief that falls within the definitions in this guidance, using a grant under section 31 of the Local Government Act 2003. The department will update NNDR returns accordingly.
Eligibility principles – which properties will benefit from the relief
8. Film studio rate relief is available for a chargeable day in the financial years 2024/25 to 2033/34 for a hereditament which for the chargeable day is:
a. Used (or if unused appears that when next in use would be used) for the production of films or television programmes and in whole or in part comprises sound stages or film sets, and
b. Valued by the Valuation Office Agency (VOA) as a studio falling within one of the following VOA’s valuation categories for film studios:
i. temporary or semi-permanent filming studios
ii. older filming studios, whether converted or purpose built
iii. modern industrial conversion filming studios (typically converted to film studios post 2010)
iv. modern purpose built filming studios (typically built post 2010)
v. campus sites
9. These are the types of facilities which have seen exceptionally large increases at the 2023 revaluation. The relief is not available on materially unaltered industrial premises (even if occupied by a studio). VOA descriptions in the rating list or the “Scat” code should not be used for this test. The VOA will notify billing authorities whether they have a hereditament in their list which meets the conditions above.
10. The scheme is available to new, existing and expanding facilities. It is also available on conversions of previously industrial buildings provided they meet the tests above. As at early 2025, the government anticipated that about 40 hereditaments will qualify in about 25 billing authorities.
11. There are no occupation conditions for film studio relief. Relief is available where the above conditions are met irrespective of whether the property is occupied or whether occupation or ownership changes.
How much relief will be available?
12. For hereditaments eligible for the film studios business rates relief scheme, the maximum chargeable amount for each chargeable day is:
a. The chargeable amount which would be found by applying paragraph 1 of Schedule 4ZA or paragraph 1 of Schedule 4ZB to the 1988 Act multiplied by 60%.
13\ For the avoidance of doubt, the chargeable amount found by applying paragraph 1 of Schedule 4ZA includes the effect of any current improvement relief. The value “A” in paragraph 1 is the rateable value in the list less any current Improvement Relief certificate (G) (see paragraph 10(2) of Schedule 4ZA). The paragraph 1 chargeable amount ignores other reliefs such as transitional relief, section 44A relief or any other mandatory or discretionary relief scheme.
14. Where the maximum chargeable amount is less than the actual chargeable amount for the day (after all other reliefs) then authorities should award discretionary relief reducing the chargeable amount for the day to the maximum chargeable amount. Where the maximum chargeable amount is more than the actual chargeable amount (after all other reliefs) then no film studio relief should be awarded. Example calculations are at Annex A.
15. Where the rateable value on the subject hereditament changes, including retrospectively when due to Checks, Challenges or Appeals, authorities should recalculate the relief with retrospective effect (but see the section below on clawback). Authorities should ensure their relief schemes allow for these recalculations, including the clawback provisions, in respect of prior years.
Subsidy control
16. Film studios business rates relief awards are likely to amount to subsidies. In December 2024, the government referred an Assessment of Compliance of the proposed relief scheme to the Subsidy Advice Unit, as a Subsidy Scheme of Particular Interest. The SAU’s report was published on 28 January 2025, providing their evaluation of the government’s Assessment of Compliance with the requirements set out in the Subsidy Control Act 2022.
17. Under the Scheme, any business rates relief awards made in accordance with this guidance are judged to be consistent with the subsidy control principles. This means that local authorities who satisfy themselves that an award complies with this guidance are not required to conduct their own assessment of the award against the subsidy control principles. It also means that a subsidy awarded under the scheme that complies with this guidance is insulated from legal challenge under the Subsidy Control Act. There is no cap to the value of a business rates relief award that can be made under the Scheme. For the avoidance of doubt, subsidies awarded under the Scheme do not constitute nor contribute to Minimum Financial Assistance.
18. Local authorities will also have an obligation to report individual subsidies awarded under the scheme. Subsidies above £100,000 awarded under this scheme are subject to transparency requirements. This is not cumulated per beneficiary but applies per subsidy award. This means that for every individual subsidy provided of more than £100,000, the local authority needs to include details of the subsidy on the subsidy control database and link that award to the Business Rates Relief for Film Studios subsidy scheme. Local authorities will need to create an account to use the Manage UK Subsidies Portal. This will enable users to upload subsidy schemes and awards. To gain access, users must email subsidydatabase@businessandtrade.gov.uk.
Clawback of relief
Clawback: general policy
19. The level of support provided by the film studio relief scheme and the 10 year duration of the scheme has been determined by the government on the assumption that:
a. The rateable values in the 2023 rating list will continue to reflect the outcome of the VOA’s January 2024 review of film studio rateable values (“the January 2024 review”), and
b. For the rating lists commencing on 1 April 2026, 2029 and 2032, the film studio sector and those ratepayers falling within this rate relief scheme cooperate fully with the VOA in the preparation of the draft rating lists and discuss the valuation scheme prior to the draft list being published. And that the rateable values subsequently shown in those lists will continue to reflect the levels of value adopted in the respective draft lists. As discussed below, the government may review the level of relief in the event of significant changes in rateable values at future revaluations based upon the draft rating lists.
20. Therefore, the government intends that billing authorities will be able to clawback some or all relief in the event that, following Checks, Challenges or Appeals by the ratepayers, or any other reason, the level of rateable value departs from the outcome of the January 2024 review or the draft 2026, 2029 or 2032 rating lists. To meet this objective, this section applies a chargeable amount floor below which bills cannot fall whilst still being awarded film studio rate relief.
Application of the clawback and chargeable amount floor
21. Billing authorities should not apply the clawback provisions unless the VOA have issued a clawback certificate. Therefore, in the absence of such a certificate, authorities may, in the event of alterations to rateable values retrospectively or otherwise, recalculate the relief in line with the rules in paragraphs 12 to 15 of this guidance without regard to this clawback provision.
22. However, where the VOA have issued a clawback certificate for the chargeable day, or any previous day to the extent that it could affect the chargeable amount (such as due to transitional relief), then authorities should apply a chargeable amount floor below which the chargeable amount for the day should not fall as a result of this relief scheme. The chargeable amount floor is:
a. The chargeable amount which would have applied for the day under this rate relief scheme had the rateable value in the list for the chargeable day and any previous chargeable day been the rateable value provided by the VOA in a clawback certificate/s.
23. Where the VOA amends a rateable value with an earlier effective date (i.e. a backdated alteration) and issues a clawback certificate with effect from that earlier day (or any other earlier day) then the billing authority should recalculate the rates bill with retrospective effect and clawback relief as necessary.
24. For the avoidance of doubt, the clawback cannot operate so as to give a chargeable amount for the day which is more than the chargeable amount absent the relief scheme. (The provisions for discretionary relief under section 47 of the 1988 Act do not allow authorities to increase the rates bill above the level which would have applied absent the relief.) If, exceptionally, the rateable value is reduced to such a degree that the chargeable amount floor calculated using the clawback certificate is more than the chargeable amount for the day ignoring the film studio relief then no film studio relief should apply for the day (i.e. in effect all of the relief is clawed back).
The clawback certificate
25. Following an amendment to the 2023 rating list or in compiling or altering later rating lists, the VOA shall certify what the rateable value would have been entered into the list for a chargeable day or days, adopting the matters listed in paragraph 2(7) of Schedule 6 to the 1988 Act as they existed at the material day for the list alteration (or for compiled lists the first day of the list) but adopting the £m2 values that would have been applied:
a. In respect of the 2023 rating list, at the conclusion of Film Studio review in January 2024, or
b. In respect of the 2026, 2029 or 2032 rating lists, at publication of the draft rating list.
26. In effect the VOA will disregard any valuation evidence or wider valuation scheme amendments that have been received or occurred since January 2024 or publication of the draft 2026, 2029 or 2032 rating lists (irrespective of whether that evidence exerts an upward or downward pressure on the valuations). In most cases this will result in the £m2 adopted following the January 2024 review or the draft rating list being adopted for the purposes of certification. There may be instances, (for example where the VOA has accepted that the overall quality or location is poorer than assumed at the conclusion of review/draft list or a post compilation permanent MCC has occurred) that may lead to an alternative £m2 to be adopted in the certificate. However, when certifying the VOA would not consider any evidence received post review/draft list and any alternative £m2 should fall within the value range adopted within the review/draft for that type of studio.
27. The VOA is not required to issue a certificate if, in respect of the chargeable day, the certified value is the same as the rateable value in the list.
28. The certificate should show the day the certified value commences. The certified value shall cease to have effect from either the day it is superseded by a later certified value (including if the certified value becomes the same as the value in the rating list) or the last day of the rating list. The VOA may need to certify several values over the course of a list where the rateable value changes (such as for material changes in circumstances) and may include those certified values on a single certificate. The VOA may amend or withdraw a certificate where, for example, the facts have changed, the VOA has changed their opinion or they have issued the certificate in error.
29. Where the effective date of an alteration has been limited to the date the list was altered then the claw-back certificate shall also take effect from the date of list alteration.
30. The VOA are instructed by the Ministry of Housing, Communities and Local Government (under section 10(1), (b) & (c) of the Commissioners for Revenue and Customs Act 2005) to issue clawback certificates in line with these rules for the duration of the film studio relief scheme. Examples of how the clawback would operate are at Annex A.
Review of relief
31. The government may review the scheme and the level of relief if:
a. There are significant changes in rateable values at future revaluations based upon the draft rating lists, or
b. The outcome of the January 24 review or future draft lists in this sector come under successful widespread challenge or appeal in respect of the level of value per m2 in the review/draft list.
Annex A: Example calculations
Examples of the film studio relief calculation
Example 1: A film studio has seen its rateable value increase at the 2023 revaluation from £500,000 when it was valued as an industrial property to £2,000,000 and now valued as a film studio.
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | 1,024,000 | 1,092,000 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£673,650 | -£543,910 |
| Rates bill before film studio relief | £350,350 | £548,090 |
| Film Studio Relief (see below) | n/a | n/a |
| Net rates bill | £350,350 | £548,090 |
| Calculation of Film Studio Relief | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £1,092,000 |
| Maximum Chargeable Amount | n/a | £655,200 |
| Film Studio Relief | n/a | n/a |
In example 1, the studio benefits from transitional relief in both 2023/24 and 2024/25 and the rates bill before film studio relief in 2024/25 is less than 60% of the bill before transitional relief. Therefore, no film studio relief is necessary.
Example 2: A film studio has seen its rateable value increase at the 2023 revaluation from £750,000 when it was valued as an industrial property to £2,000,000 and now valued as a film studio.
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | 1,024,000 | 1,092,000 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£511,475 | -£316,865 |
| Rates bill before film studio relief | £512,525 | £775,135 |
| Film Studio Relief (see below) | n/a | -£119,935 |
| Net rates bill | £512,525 | £655,200 |
| Calculation of Film Studio Relief | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £1,092,000 |
| Maximum Chargeable Amount | n/a | £655,200 |
| Film Studio Relief | n/a | -£119,935 |
In example 2, the studio benefits from transitional relief in 2024/25 but the rates bill before film studio relief is more than 60% of the bill before transitional relief. Therefore, film studio relief is awarded to bring the bill down to the maximum chargeable amount.
Example 3: the studio in example 2 sees an increase in its rateable value to £2,500,000 from on 1 April 2024. That increase is eligible for improvement relief.
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | 1,024,000 | 1,365,000 |
| Improvement Relief | n/a | -£273,000 |
| Transitional Relief | -£511,475 | -£316,865 |
| Rates bill before film studio relief | £512,525 | £775,135 |
| Film Studio Relief (see below) | n/a | -£119,935 |
| Net rates bill | £512,525 | £655,200 |
| Calculation of Film Studio Relief | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £1,092,000 |
| Maximum Chargeable Amount | n/a | £655,200 |
| Film Studio Relief | n/a | -£119,935 |
In example 3, the improvement relief removes from the rates bill the impact of the eligible improvements for 12 months leaving the remainder of the calculation and the rates bill unaffected from example 2. At the expiry of the 12 months the additional £500,000 of rateable value will flow through into the rates bill but attract film studio relief.
Examples of the claw-back mechanism.
Example 4: the studio in example 2 secures a reduction in their rateable value from 1 April 2023 from £2,000,000 to £1,900,000. This reduction arises from a reduction in the underlying £m2 adopted for the studio at January 24 review. The VOA issued a claw-back certificate with a rateable value of £2,000,000.
The rates bill before the claw-back is as follows:
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | £972,800 | £1,037,400 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£461,575 | -£266,965 |
| Rates bill before film studio relief | £511,225 | £770,435 |
| Film Studio Relief (see below) | n/a | -£147,995 |
| Net rates bill | £511,225 | £622,440 |
| Calculation of Film Studio Relief | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £1,037,400 |
| Maximum Chargeable Amount | n/a | £622,440 |
| Film Studio Relief | n/a | -£147,995 |
Obviously, the bill has fallen following the reduction in the rateable value. Given that the VOA have issued a claw-back certificate at £2,000,000 rateable value, the Chargeable Amount Floor is, therefore, the bill which would have applied with that rateable value – i.e. the bill from example 2 of £655,200. Therefore, the rates bill after the claw-back is as follows:
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | £972,800 | £1,037,400 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£461,575 | -£266,965 |
| Rates bill before film studio relief | £511,225 | £770,435 |
| Film Studio Relief (see below) | n/a | -£115,235 |
| Net rates bill | £511,225 | £655,200 |
| Calculation of Film Studio Relief & claw-back | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £1,037,400 |
| Maximum Chargeable Amount | n/a | £622,440 |
| Film Studio Relief before clawback | n/a | -£147,995 |
| Chargeable Amount Floor | n/a | £655,200 |
| Film studio relief after claw-back | n/a | -£115,235 |
Therefore, the claw-back mechanism has reduced the film studio relief from £147,995 to £115,235. The bill is restored back to the level in example 2.
Example 5: the studio in example 2 secures a reduction in their rateable value from 1 April 2023 from £2,000,000 to £1,800,000. This reduction arises in part from a reduction in the underlying £m2 adopted for the studio at the January 24 review and in part from the correction of errors found in the survey. The VOA issued a claw-back certificate with a rateable value of £1,900,000.
The rates bill before the claw-back is as follows:
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | £921,600 | £982,800 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£411,675 | -£217,065 |
| Rates bill before film studio relief | £509,925 | £765,735 |
| Film Studio Relief (see below) | n/a | -£176,055 |
| Net rates bill | £509,925 | £589,680 |
| Calculation of Film Studio Relief | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £982,800 |
| Maximum Chargeable Amount | n/a | £589,680 |
| Film Studio Relief | n/a | -£176,055 |
As before, the bill has fallen following the reduction in the rateable value. Given that the VOA have issued a claw-back certificate at £1,900,000 rateable value, the Chargeable Amount Floor is, therefore, the bill which would have applied with that rateable value – i.e. the bill from example 4 before the claw-back - £622,440. Therefore, the rates bill after the claw-back is as follows:
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | £921,600 | £982,800 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£411,675 | -£217,065 |
| Rates bill before film studio relief | £509,925 | £765,735 |
| Film Studio Relief (see below) | n/a | -£143,295 |
| Net rates bill | £509,925 | £622,440 |
| Calculation of Film Studio Relief & claw-back | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £982,800 |
| Maximum Chargeable Amount | n/a | £589,680 |
| Film Studio Relief before clawback | n/a | -£176,055 |
| Chargeable Amount Floor | n/a | £622,440 |
| Film studio relief after claw-back | n/a | -£143,295 |
Therefore, the claw-back mechanism has reduced the film studio relief from £176,055 to £143,296. The bill has still seen some reduction from the level in example 2 reflecting the fact some of the reduction is as a result of corrections to the survey.
Example 6: the studio in example 2 secures a reduction in their rateable value from 1 April 2023 from £2,000,000 to £1,000,000. This reduction arises from a reduction in the underlying £m2 adopted for the studio at January 24 review. The VOA issued a claw-back certificate with a rateable value of £2,000,000.
The rates bill before the claw-back is as follows:
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | £512,000 | £546,000 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£12,475 | n/a |
| Rates bill before film studio relief | £499,525 | £546,000 |
| Film Studio Relief (see below) | n/a | -£218,400 |
| Net rates bill | £499,525 | £327,600 |
| Calculation of Film Studio Relief | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £546,000 |
| Maximum Chargeable Amount | n/a | £327,600 |
| Film Studio Relief | n/a | -£218,400 |
Obviously, the bill has fallen following the reduction in the rateable value. Given that the VOA have issued a claw-back certificate at £2,000,000 rateable value, the Chargeable Amount Floor is, therefore, the bill which would have applied with that rateable value – i.e. the bill from example 2 of £655,200. This is more than the new chargeable amount ignoring the film studio relief (£546,000 in 2024/25). Therefore, the relief is clawed back in full – i.e. the film studio relief does not apply – and the rates bill after the claw-back is as follows:
| 2023/24 | 2024/25 | |
|---|---|---|
| Gross rates bill before reliefs | £512,000 | £546,000 |
| Improvement Relief | n/a | n/a |
| Transitional Relief | -£12,475 | n/a |
| Rates bill before film studio relief | £499,525 | £546,000 |
| Film Studio Relief (see below) | n/a | £0 |
| Net rates bill | £499,525 | £546,000 |
| Calculation of Film Studio Relief & claw-back | ||
| Paragraph 1 Sch 4ZA/4ZB amount | n/a | £546,000 |
| Maximum Chargeable Amount | n/a | £327,600 |
| Film Studio Relief before clawback | n/a | -£218,400 |
| Chargeable Amount Floor | n/a | £655,200 |
| Film Studio Relief after claw-back | n/a | £0 |