What makes the UK so desirable for Hollywood studios?

A recent report published by the BFI has revealed that, in 2025, UK film production costs hit £6.8 billion, a 22% increase on last year.

The majority of this has been attributed to inward investment from major Hollywood studios, who outsource production to the UK in pursuit of the government’s generous tax breaks. The top 10 grossing films of last year reflect this trend, with six of them being filmed in the UK, including A Minecraft Movie and Jurassic World: Rebirth.

So why is it that so much money is being poured into UK film production, and why is so much of it coming from Hollywood?

UK tax relief saves studios huge chunks of their budget, allowing them to make a greater profit while keeping financing and control of the production contained to the US

Films which choose to shoot in the UK are given a 25% tax rebate by the government, which provides great incentive for Hollywood productions to base their filming here. In addition to our cheaper labour, UK tax relief saves studios huge chunks of their budget, allowing them to make a greater profit while keeping financing and control of the production contained to the US.

Looking to keep the film industry alive during the COVID-19 pandemic, the government recognised the economic benefits of shooting Hollywood films here, and made American stars travelling for shoots exempt from quarantine regulations. This helped to mitigate further damage to the industry during the pandemic and gave US studios further incentive to favour our facilities.

However, tax reliefs for this purpose have been criticised as they prioritise blockbuster production over smaller independent films. To be eligible for funding, the film must pass the BFI’s ‘cultural test’, which determines whether it can be considered British enough to receive funding from British film funds. The system is riddled with loopholes, as productions which simply feature the English language or actors who reside in the UK can pass, even if they are set in the US.

This leads to smaller indie productions missing out on funding from the BFI, as the less-risky ‘British’ films are being financed instead. An example of this is The King’s Speech, which was given a £1 million investment from the UK Film Council (now abolished due to criticisms against it) despite being a sure-fire hit, based on a British historical event and starring famous English actor Colin Firth. The film made £300 million worldwide according to Box Office Mojo, proving that it did not need state funding, and could’ve easily picked the money up elsewhere.

American studios also tend to pay British crew higher wages. If crew members are in a contract with the studio, this can provide consistent work and job security, which is rare in the film industry.

It will be harder for independent film productions to attract a crew, as they likely won’t offer the wages and job security that the major studios can

For example, in 2024, Amazon acquired Bray Studios in Windsor and has given staff permanent roles for the productions hosted there. However, this means that it will be harder for independent film productions to attract a crew, as they likely won’t offer the wages and job security that the major studios can.

The UK is also home to a great range of expertise, which is appealing to major film studios, particularly for productions that rely on a lot of visual effects. For instance, Soho in London is home to four of the largest visual effects companies in the world, making the South East a prime production base for blockbuster films.

The government recognises the potential of a booming UK film industry, and has therefore invested a lot of money recently into the construction of film studios in the area surrounding London, such as Shinfield studios in Reading, which hosted the production of Ghostbusters: Frozen Empire, and Sky Studios Elstree, which is currently under construction.

Another benefit of filming in the UK is the vast variety of filming locations available outside of the studio. In one of the few ways that it stayed true to the book, Emerald Fennell’s Wuthering Heights adaptation was filmed in the sweeping hills of North Yorkshire. And, with Sam Mendes’ upcoming Beatles films beginning shooting, we can only expect lots of iconic landmarks in Liverpool to be commandeered by production.

These developments could prove to weaken the production industry in Hollywood, directing profits towards UK-based production companies, boosting our economy and providing jobs.

At the end of the day, though, Hollywood studios are still profiting off the films produced here, and saving money on labour costs and through tax incentives.

Ultimately, US productions dominate the studios and are preferred by financers as they appeal to the masses and are guaranteed to turn a profit. Inevitably then, independent productions will find less funding, as they will only appeal to a small portion of the UK population.

Ironically, it will now be the films produced in the UK which prove a threat to films which are conceptualised and created from real British stories and settings, and which reflect our rich cultural diversity.