Independent filmmakers will soon be able to claim back 53% of spending on items such as equipment, location costs and paying actors.

Productions costing up to £15 million will be eligible for the tax relief, designed to encourage more people to make films in the UK.

Critically acclaimed films such as Rye Lane and Aftersun would have been able to claim the tax credit, with budgets of £3 million and £2.2 million respectively.

Aftersun’s producer Amy Jackson called it a “vital intervention” for the film industry, enabling producers to “explicitly focus on bringing incredible stories by British talent to the big screen while building out exciting co-production opportunities”.

Chancellor Rachel Reeves said: “By supporting growth in this vibrant sector, we can create jobs and continue to show Britain at its best around the world.”

The UK film sector is estimated to be worth about £1.36 billion and employs more than 195,000 people.

The so-called Independent Film Tax Credit (IFTC) can be claimed on most costs related to shooting and producing the films, but not marketing and distribution.

Films must have a UK writer, director or be certified as a UK co-production to quality for the relief, and must have started principal photography after April 1 2024.

The plans mark a continuation of a policy announced by former Conservative chancellor Jeremy Hunt in March.

Culture Secretary Lisa Nandy said: “The UK’s first-class independent filmmakers have a track record of creating cult classics and surprise hits that are enjoyed by millions.

“Their films showcase British culture and creativity to the world while also supporting thousands of jobs and driving economic growth in all parts of the UK.

“These reliefs will pay dividends both culturally and economically, inspire the next generation of talent across the country, deliver more great British content, and sustain a world-leading industry here in the UK.”

The announcement comes as the London Film Festival gets under way on Wednesday, featuring new films including Steve McQueen’s World War Two drama Blitz, Angelina Jolie’s biopic of opera singer Maria Callas and Daniel Craig’s historical drama Queer.

Ben Roberts, BFI chief executive, said: “Independent filmmaking is vital to our cultural expression and creativity, it builds careers for talent in front of and behind the camera, and also showcases UK creative excellence on a world stage.”

Zygi Kamasa, founder and chief executive of theatrical film distributor True Brit Entertainment – which specialises in independent British film, said: “The introduction of the new enhanced tax relief for UK films is great news for our industry and audiences.

“We are already seeing a positive sea-change for working with British talent and creating home-grown British films.

“Our new company True Brit is passionate about the kinds of films we can make in the UK, with projects prepped for production next year and others already being made in the UK.

“The ratification of the IFTC will ensure that many more independent British films will get made and be a significant boost to the entire industry.”

Image: Culture Secretary Lisa Nandy (second left) with by Andrew M Smith, corporate affairs director for Pinewood group (left), filmmaker Gurinder Chadha (second right) and Pinewood group chief executive David Conway (right) during a visit to Pinewood Studios in Iver Heath, Buckinghamshire, to announce new measures to grow the economy and support the UK’s film sector (Andrew Matthews/PA)