Takings at UK cinema box office passed the £1bn mark for the first time last year, according to the British Film Institute (BFI).
Helped by the success of films including The King's Speech and The Inbetweeners, figures show earnings increased by 5% to £1.04bn.
Harry Potter and the Deathly Hallows Part 2 was the highest earning film of 2011 pulling in £73 million at the box office in the UK and the Republic of Ireland. The next most successful were The King's Speech and The Inbetweeners which earned £45.6 million and £45 million respectively. Pirates of the Caribbean: On Stranger Tides and The Hangover 2 rounded off the top five biggest earners.
Total admissions were also up 1.4% from 2010 with 171.6m tickets sold. Market share for all British films at the UK box office, including independents and those shot in the UK but financed from abroad, reached 36.2%, up from 24.0% in 2010.
The BFI said the strong performance was driven by the popularity of both British independent films like The Inbetweeners and blockbusters made in the UK with British talent, crew and services, including the Harry Potter series and Sherlock Holmes: A Game of Shadows.
BFI boss Amanda Nevill said: "Film is at the very core of Britain's cultural life and today's figures show that the appetite for cinema-going across the UK is as healthy as ever. 2011 was a phenomenal year, with the box office results showing that independently produced British films captivated audiences.
"That said, we are pragmatic; it's still a challenging time for filmmakers trying to raise finance to make independent British films in this tough economic climate.
"As we enter 2012 many challenges remain, but today's figures clearly show that keeping audiences at the heart of everything we do will help the British film industry to enjoy even greater success in the future and continue to be an important contributor to the UK economy."
Top 10 grossing films in 2011
1. Harry Potter and the Deathly Hallows Part 2 - £73.1m
2. The King's Speech - £45.7m
3. The Inbetweeners Movie - £45m
4. Pirates of the Caribbean: On Stranger Tides - £32.9m
5. The Hangover 2 - £32.8m
6. The Twilight Saga: Breaking Dawn Part 1 - £30.7m
7. Transformers: Dark of the Moon - £28.1m
8. Sherlock Holmes: A Game of Shadows - £23.1m
9. Bridesmaids - £23m
10. Arthur Christmas - £20.8m