EU demands tougher tests for UK film tax reliefs

The UK film
can continue to take advantage tax relief available to the
sector, but will have to meet more stringent requirements to do so, the EU
decided today.

Tax reliefs for UK filmmakers were introduced in the 2006 Finance Bill and
received royal assent in July this year. The regime, however, required
EU State Aid Approval, which was granted today.

Fiona Hotston Moore, managing partner of
MRI Moores Rowland
, said the announcement would have a negative impact on the long term future
of the local film industry because of new cultural requirements, since it would
deter US studios who help foster British film making.

‘If a film was filmed and produced in the UK and the dialogue was in English
it would be eligible for tax relief. The new cultural test means that the
producer and director will have to be British to claim the reliefs,’ Hotston
Moore said.

A number of US studios have chosen the UK as a location because of the tax
reliefs, but the new rules mean that many of these studios will no longer be
eligible for the reliefs.

Further reading:

Fiona Hotston Moore, of Moores Rowland

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Draft film tax relief regulations published

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