Budgeting for 2025: UK Tax Increases Impacting Film & TV Productions

On October 30, 2024 the UK’s new Labour government announced its first Budget, in which it set out its plan to raise £40b in taxes.

In line with its New Deal for Working People, the government made no changes to income tax thresholds or the rate of national insurance contributions (NICs) for employees and the self-employed. 

Instead, the government announced significant increases in both employers’ NICs and the National Living Wage (NLW) and National Minimum Wage (NMW), which will come into effect in April 2025.

If you’re planning to shoot in the UK in 2025, it’s important that you’re aware of these changes so that you can factor the increased costs into your production budgets.

Changes to Employer NICs

In the UK, both employees and employers are required to pay NICs as a tax on employee earnings and benefits.

From April 6, 2025, the NI rate paid by employers will increase from 13.8% to 15%.

In addition, the threshold at which employers start paying NI on each employee’s earnings will be reduced from £9,100 a year to £5,000, leading to a significant increase in NIC bills for employers. 

To offer some reprieve for smaller businesses, the employment allowance will increase from £5,000 to £10,500, so eligible employers will only start paying employer NICs when each employee’s earnings have passed the £10,500 threshold (see here for more information on employment allowance eligibility).

Note that a higher secondary threshold of £50,270 applies for employees who are under 21 and apprentices under 25.

Below is an example of what these changes could look like in practice.

Increase in National Living and National Minimum Wages

The NLW and the NMW will both increase from April 1, 2025.

These changes are a step towards the government’s intention to align the NLW and the NMW over time, creating a single adult wage rate.

No change to employee contributions

As mentioned above, there is no change to income tax or NICs for employees or the self-employed. The government has confirmed that the income tax thresholds will remain frozen until 2028.

What do the increased employer NICs and NLW and NMW rates mean for production budgets?

The increase in employers’ NICs and the reduction of the threshold for NICs – as well as the increased NLW and NMW – could have a significant impact on hirers in the film and TV industry.

If you’re planning to shoot in the UK in 2025, you’ll need to be mindful of these increased costs and the dates on which they come into effect so that you can factor them into your production budgets. 

Note that these changes apply to any business with employees beyond April 1 (for the changes to the NLW and NMW) and April 6 (for the changes to employer NICs), so they will impact existing productions as well as new ones.

How EP can help you to budget for 2025 payroll changes

When it comes to managing your budget, the team at Entertainment Partners is here for you every step of the way. We've got the tools you need to manage your production finances, as well as UK-based payroll experts with years of industry experience to answer your questions.

If you'd like to learn more about how we can support your UK productions, contact us today!