Film tax relief fillip
The extended time limit for claiming tax breaks on investments in film production has already provided a much-needed boost to the UK movie industry. John Stokdyk reports.
The Inland Revenue has extended the period during which relief can bem production has already provided a much-needed boost to the UK movie industry. claimed on film production costs following last month’s government Film Policy Review Group report.
The time limit for claiming tax relief has been extended from three years to five and now applies to expenditure incurred between 2 July 1997 and 1 July 2002. The relief is available for films costing #15m or less, that have been approved by the Department of Culture, Media and Sport.
Robert Watts, KPMG’s head of media taxation, welcomed the move. ‘The two-year extension will be of real significance because it will make investors feel more comfortable over the long term,’ he said.
Combined with the welcome increase in Enterprise Investment Schemes allowances announced in this year’s Budget, and changes to permit 100% write-offs of film costs against revenues last year, Watts claimed that the government’s policy to support the UK film industry was already beginning to bear fruit.
‘We’re now seeing a very significant upturn in activity,’ said Watts.
‘Financial institutions used to be frightened off. But they are looking more closely and buying into films because they can now take a 100% write-off in the first year.’
The combination of the EIS and write-off extension would allow individuals to invest in films and get immediate tax relief. Small UK producers would benefit because the investment schemes would allow them to spread their risks across a raft of films, rather than staking everything on one hit-or-miss title, Watts explained.