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| 06 December 2005 |
Chancellor announces tax credit for UK film productions |
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Chancellor Gordon Brown has announced a new film tax credit, which sees low budget films (with production budgets up to £20 million) receive a tax credit of 20% and higher budget films (with production budgets of £20 million and above) a credit of 16%.
Both rates apply to the UK spend of a film’s budget, capped at 80%.
Also announced was a more flexible system allowing producers to phase tax credits, taking them either at the start of production, or later when they are receiving profits from the film.
The measures are designed to enable the UK to compete in global film market bringing jobs and investment to the UK and a consistent flow of British films to UK audiences
The UK Film Council applauded the credit, saying that it will support the UK industry development as the most important in the world after the US.
The tax relief will provide a solid base for the production of independent British films such as ‘Mrs Henderson Presents’, ‘Bend it like Beckham’, ‘Shaun of the Dead’ and ‘Vera Drake’; and internationally puts the UK in pole position for attracting big budget US studio films such as ‘Charlie and the Chocolate Factory’ and ‘Batman Begins’.
John Woodward, Chief Executive Officer of the UK Film Council, said: “This announcement by the Chancellor is the best news the British film industry has received for five years. It marks a new era for the future growth of our industry which operates in a highly competitive global marketplace.
“It’s good news for the production of culturally rich British films that promote Britain around the world. It’s also good news for jobs and the economy as we will be able to attract big budget films to UK shores.
“The UK has one of the most highly skilled film workforces in the world and last year film production contributed £3.1 billion to UK GDP. The new tax regime will support everything from big budget films like ‘Harry Potter’, to lower budget British comedies and thrillers, as well as films from auteur directors such as Ken Loach, Michael Winterbottom and Mike Leigh.
“Audiences in the UK and abroad love British films, and today’s announcement will ensure that a consistent flow of British films will continue to be produced for the enjoyment of all.”
Commenting on the new cultural test, John Woodward added: “This test will be simple, clear and effective for filmmakers to use. It will mean that taxpayers’ money will be spent on films delivering a cultural and economic benefit to the UK.”
Adrian Wootton, CEO of Film London, also warmly welcomed the Chancellor’s announcement.
He said: “This is fantastic news for the London film industry. We now have the competitive edge to further extend our position as one of the great production centres of the world.
“We are delighted that the Chancellor has recognised the cultural and economic importance of the film industry and the benefits that feature films bring to the UK. This year big-budget productions such as ‘The Da Vinci Code’, ‘Stormbreaker’ and ‘V for Vendetta’ have successfully shot in London, using unprecedented support on the ground through the new London Filming Partnership. This new tax relief means we look forward to attracting even more films of this calibre in 2006 and beyond.
“We also welcome the clarity of the new transitional arrangements and cultural test which we are confident will simplify the implementation of the tax relief.”
(GB)
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