Taxation - Film tax breaks failing
The government’s much-vaunted policy of stimulating investment in the UK film industry is being undermined by civil servants who are dragging their feet over tax incentives, a Deloitte & Touche report claimed last week.
The extensive report, called ‘The Cost of Making Dreams’, assesses the financial health of the UK film industry and the raft of government tax reforms designed to help it.
One of the main tax incentives for the film industry is the ability to claim 100% tax relief on production costs of films under £15m. In March the government said it would make the relief available for a further two years, to July 2002
Gavin Hamilton-Deeley, head of Deloittes media and entertainment group, welcomed the increased tax support but criticised the Inland Revenue for not moving quickly enough to provide tax incentives for cash-hungry production companies.
‘There is only a modicum of support for the government legislation. It takes longer than required to obtain approval for tax relief,’ said Hamilton, who called for greater co-operation between the government and tax authorities.
Hamilton added, however, that the recent changes to accounting standards for intangible assets and goodwill – FRS 10 and FRS11 – would be useful in encouraging greater uniformity within film industry financial reporting.
‘The US has very specific accounting standards for the film business but we don’t,’ said Deeley.