Taking effect from July next year, it will replace section 48 and allow UK films that cost up to £20m to claim back 20% of their budgets through the new arrangement ð meaning an extra £4m of funding, compared to £2.25m under the previous rule.
The relief applies to all production expenditure, not just money spent in the UK, with the cash paid straight to film makers. This makes it less open to aggressive tax abuse.
The news will be welcomed by the likes of Warp Films, whose Dead Man’s Shoes goes on general release next month.
John Woodward, CEO of the UK Film Council, said that the new tax credit would ‘take a few months to bed down’, but added that it was ‘extremely good news’ that the new relief will apply to 100% of the film’s costs – rather than just the money spent in the UK.
Stephen Margolis, managing director of film finance company Future Films, said the tax credit was ‘an extremely positive move for the UK film industry, and would encourage inward investment’.
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