Government break for film producers
Government tax changes that take effect later this month will encourage more UK-based film production, film finance experts said this week.
Last year the government’s policy of boosting production in the UK received a setback when Star Wars director George Lucas said he would film the next two films in the series in Australia.
The original three films were produced in the UK. The first of the three prequels, the Phantom Menace, goes on general release today.
Ministers have been keen to boost the UK industry in recent years by allowing British films with budgets of less than £15m to claim 100% tax relief on production costs over one year.
But tax experts have argued that the government’s definition of a UK film has been too restrictive and excluded many companies from receiving the breaks.
In response the government announced proposals last week to widen the definition of a British film by requiring companies to spend only 70% of the film’s budget in the UK.
The new rules on film finance should take effect later this month, Robert Reed, director in Deloitte & Touche’s media and entertainment group, welcomed the government initiative.’It allows film makers more freedom in where they can make the film,’ he said.