Paymaster general treatens film industry

Paymaster general Dawn Primarolo has threatened the film industry with an
immediate ‘clampdown’ if there are any signs of the new tax incentives being
used for avoidance, writes our parliamentary correspondent.

She reacted after being challenged in the House of Commons on how confident
she is that the new tax regime for the film industry ‘will be generous enough to
help UK film producers while being robust enough to prevent yet another spawning
of the so-called tax avoidance industry’.

Primarolo said: ‘The incentives will now be more effectively targeted and
therefore less vulnerable to manipulation and avoidance than the current

But she added: ‘It is, however, almost impossible to anticipate the
creativity of the avoidance industry.’

Proposals announced by chancellor Gordon Brown in his pre-Budget report
include allowing films costing up to £20m a guaranteed minimum benefit worth 20%
of qualifying production costs and a benefit worth 16% for films costing more
than £20m.

Primarolo said that the incentives would be even more valuable for profitable

The government hopes the new incentives will encourage films such as the new
Bond movie to be made in the UK.

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