Films such as Rogue One: A Star Wars Story, which grossed $1bn (£745m) worldwide, helped generate £7.7bn in revenue last year – an 80% increase from five years ago.
The industry is expected to produce another impressive performance, with Paddington 2 and Star Wars: The Last Jedi, released today, set to dominate cinemas over the Christmas period.
According to the Office for National Statistics (ONS), the industry has had “spin off benefits” for other parts of the economy, with production generating £2.5bn for the economy, and distribution yielding £3.5bn.
Additionally, nearly 60,000 people are employed within the film and television industry – a figure that has continued to rise since 2013.
The ONS said tax breaks for creative industries – such as film, television and video games – played a significant role in bringing big-budget productions to Britain.
The creative industries tax relief programme, initially created in 2007 for British film and later expanded to other media forms in the UK, allows production companies to claim a 25% cash rebate on money spent creating them (up to 80% of the their core expenditure).
In order to qualify as British for tax purposes, films are required to pass a “cultural test”, largely based on how much of its story, setting, production and crew are British (or from the European Economic Area).
Alternatively, the film can be an official co-production from a country that has a reciprocal agreement with the UK, or through the European Convention on Cinematographic Coproduction.
The British Film Institute has certified nearly 2,000 films in this way over the past decade, including Star Wars: The Force Awakens, Skyfall, Spectre, and Beauty and the Beast.
Thus far, HMRC has paid £2.3bn of film tax relief, representing £9bn spent on films made on British soil.