TV companies lose out on tax break
Tax experts are warning that television production companies will face dwindling investment and increased costs after the chancellor removed a crucial tax break in last week's Budget.
The ‘sale and leaseback’ concession added 10% to a producer’s budget and was set up in 1997 to encourage investment in film production.
It was extended to TV dramas in 1999 and was used to help investment in dramas and series including Bafta-winner Bob and Rose and nominee Clocking Off.
Ian Pugh, research analyst at tax consultants Allenbridge Group, said: ‘Outlawing the tax break for TV production will impact on availability of investment and pricing.’
The tax break is now restricted to UK films to be released in commercial cinemas. What is causing even more consternation is Gordon Brown’s decision to disqualify from relief any production completed before 1 January 2002 and without a certificate from the Department of Culture, Media and Sport.
A spokesman for the Producers Alliance for Cinema and Television said: ‘The future looks bleak for quality of production in the UK.’
The Treasury says it ended the tax break because it felt it was being abused to subsidise long-running TV programmes such as Coronation Street.
