The Filmmaker’s Guide to the UK Cultural Test: How to Score 18 Points and Qualify for AVEC

Passing the UK Cultural Test is a key step in qualifying for the UK Audio-visual Expenditure Credit (AVEC), including the new Independent Film Tax Credit (IFTC). The Cultural Test is a pass/fail assessment of whether a film or high-end TV (HETV) show is "culturally British," and every production must accumulate at least 18 points to pass.

In this guide, I'll explain how the Cultural Test works, what the components are, how to apply, and how EP can support you – so your production can access the generous incentives the UK has to offer.

What is the UK Cultural Test and how many points do you need to pass it?

The Cultural Test is a set of requirements that determines whether a film or HETV show can be considered “culturally British.” There are four sections which can broadly be split in half:

• Sections A and B – what is seen on screen; and
• Sections C and D – who did the work and where it was done.

The Cultural Test for films and HETV shows has a total of 35 available points, with 18 needed to pass. Whether a production scrapes by with the minimum 18 points or easily scores a perfect 35 has no impact on the qualification; the test is a simple pass/fail exercise.

There is a common misconception that the Cultural Test has an impact on the value of the incentive – this is not true. You must pass the Cultural Test to qualify for an incentive, but beyond that, the test has no impact. It does not matter how you get the 18 points as long as you get them, but there is one exception (which we'll discuss below).

How to apply for a UK Cultural Test Certificate: The BFI and DCMS process

You apply for the Cultural Test online via the British Film Institute (BFI) portal; if the BFI is satisfied with your application, it will make a recommendation to the Department for Culture, Media and Sport (DCMS) to issue your certificate.

At present, the turnaround time is roughly 8 weeks. Therefore, it is key to get applications in as soon as possible, as you cannot apply for the incentive without a certificate (and an interim certificate is often a requirement from financiers for financial close as well).

There are two types of certificates available: interim and final

If you are mid-production and wish to make an incentive claim, you must have an interim certificate, which can be applied for at any time. If there is any doubt or concern about qualification, be sure to apply for an interim certificate – which will provide comfort as to qualification – as soon as possible.

1. Interim certificates are issued on the basis of the plan for your film or HETV show. You will need to include a budget, shooting schedule and script and demonstrate how you intend to pass the test on the form.
2. Final certificates can be issued only once the production is completed. This is because the BFI will need to watch the finished project to assess whether the points claimed in Sections A and B are clear on screen. For points claimed in Sections C and D, you will need an auditor’s report (see below).

UK Cultural Test points breakdown: sections A, B, C and D (35 Points)

There are 35 points available to a film under the Cultural Test. This framework applies to films, but the HETV test is fundamentally the same. The Cultural Tests for children’s TV and animation are slightly different.

As mentioned above, there is one combination of points that is not acceptable. Under what is commonly called the "Golden Points Rule," your production cannot qualify if you score points only from Sections A4, C1, C2 and D1-8. Even if those sections alone could reach 18 points, you also need points from elsewhere in the test. Otherwise, any combination is acceptable, which allows for a significant amount of flexibility.

Key things to bear in mind are:

• Section A is about what the viewer believes on screen – therefore, filming what appears to be a British village on a U.S. studio set would qualify as the film or HETV show would appear to be set in the UK.
• Similarly, an actor’s nationality does not matter for Section A2 – it is all about the nationality or residency of the character and where it is established that they are from or reside.
• The BFI is the ultimate arbiter of the availability of points in Section B and you will need to provide clear descriptions and support for how your production demonstrates the points that are being claimed. For clarity, “diversity” can apply to subject matter which explores contemporary and social issues of disability, ethnic diversity or social exclusion. Diversity also applies to characters, on-screen or behind-the-camera talent with respect to gender, ethnicity or national origins, religion or spiritual belief, age, sexuality, disability or social and economic background.
• Other than Section C, all other areas allow for UK and/or EEA locations, nationality or residency. Therefore, a character with a clear European nationality (such as Wonder Woman being Greek) would qualify within Section A2.
• You will need to have evidence to support all points claimed in Sections C and D, so it’s important to retain passports and other supporting documents if needed.

To see a detailed explanation of the points system, broken down by section, review our Cultural Test chart.

What is the auditor’s report, and when do you need it?

Auditor’s reports are required for final certificates where points are claimed in Sections C and D. These can normally be prepared by your auditor.

Effectively, this is a third party reviewing the points that are being claimed and signing off on the points as being supported. They will likely want to see evidence such as:

• Shooting schedules and set or location hire agreements for Section C1 points;
• Composer contracts and recording studio agreements or orchestral invoices for Section C2 points; and
• Passport copies for Section D points.

From a timing perspective you will need to factor in time for the auditor to prepare your report before submitting your application to the BFI, as well as the 8-10 week turnaround from the BFI and DCMS.

Does the Independent Film Tax Credit (IFTC) change Cultural Test requirements?

The introduction of the IFTC (and the broader AVEC suite of incentives) has not changed the Cultural Test itself; your production must still achieve 18 points out of 35 and pass in the same way as for a high-budget film.

However, films which qualify for the IFTC must have an auditor’s report on both interim and final applications. This auditor’s report is in addition to that discussed above and covers the IFTC qualifying criteria – namely, that:

• Core spend does not exceed £23.5m; and
• The film:
  • Has a British lead scriptwriter;
  • Has a British lead director; or
  • Is an official co-production

Who can apply for the UK Cultural Test?

You can apply for the Cultural Test yourself and submit the application with no involvement from external parties, particularly if you are only qualifying in Sections A and B.

However, it is advisable to (at a minimum) have your adviser review your application as they will likely know some of the nuances of the system and how to interpret the rules in a way to qualify in the most straightforward way.

If you are applying for a final certificate with points in Sections C and D, or for the IFTC, you will at a minimum need an auditor to sign the required auditor’s report.

For this reason, it is often easiest to ask your adviser to prepare the application for you, and it is always advisable to check in at the earliest possible stage on how a production could qualify to avoid nasty surprises down the line.

What happens if your production changes between interim and final certificates?

With the best will in the world, no production ever goes entirely to plan and there is no problem with changing points that you have applied for between interim and final certification. For example, if you have changed actors and now have a British/EEA actor but a U.S. composer, you can swap those points.

However, if the result of the changes mean that you can no longer get 18 points, you will fail the Cultural Test. If you made an interim claim under your interim certificate, you would then need to repay that incentive. This is an unusual scenario, but it could happen.

Four changes that could cost you points:

• Establishing scenes for characters get left on the cutting room floor
• Foreign exchange movements hitting proportion of spend
• Location of VFX services provided changes
• Overrunning overseas shoots

How EP supports UK Cultural Test applications, AVEC and IFTC claims

Overall, the UK Cultural Test is flexible and there are many paths that can be taken to pass it. Productions that might not initially look like they qualify can often find a way with some careful consideration or some tweaks to the script or budget.

If you’d like to know more about the Cultural Test or how to access the UK's creative sector incentives on your next production, please don’t hesitate to contact me, Lloyd Gunton, VP, Incentives UK.

With vast experience in media and entertainment accounting, tax and incentives, finance, and accounting, our expert team can provide film and TV incentive estimates, formal opinions to lenders and auditor’s reports; manage incentive claim submissions; work with producers to advise on and finalise budgets; and provide deal close support for both independent and multi-party financed projects.

This article contains general information we are providing on a subject that may be of interest to you. Nothing in this article should be considered tax, accounting, or legal advice. You should consult with your own advisors regarding the applicability of this information to your specific circumstances.