Film industry banks on new incentives
A 'producers tax credit' to replace film tax reliefs in 2005 could be announced as soon as the Budget, an expert in the sector has claimed.
Link: Pre-Budget special report
Gordon Brown prompted speculation over the tax relief system’s successor in the pre-Budget report, when he said the government would ‘consider the right incentives’ to support British film.
Christine Corner, head of Baker Tilly’s film and television group, said: ‘All the indications are that the Inland Revenue and Treasury want something new to put forward to the Department for Culture Media and Sport.’
The current system has been credited with helping to kickstart the British film industry, but expires in 2005. Introduced in 1997, it allowed for a 100% write-off on production and acquisition costs for British films with budgets of up to £15m. To qualify for the relief, 70% of the film’s costs must be spent on activity in the UK.
Corner said she expected any announcement to come in the next budget because the lengthy timeframe of filmmaking means the industry must be forewarned of changes to financial rules in order to plan properly.
‘The film industry would collapse without the tax break. We hope to see something in the next Budget and the main alternative is a producers tax credit,’ she said.
Without some form of relief the 90-100 films produced each year would be likely to fall to around 30, she claimed.