PACT/UKFC Welcome Brown's New Film Tax Regs
Chancellor Gordon Brown's announcement is good news for the British film industry and makes the UK an attractive place to make films according to John Woodward CEO of the UK Film Council. He said films will now be required to spend at least 25% of their budgets in the UK to qualify for tax relief - down from the proposed 40%.
That will mean more films are eligible for the subsidy, according to the UK Film Council - giving Hollywood a bigger incentive to make movies in Britain.
UK Film Council chief executive John Woodward said: "Today's announcement by the chancellor is good news for the British film industry and makes the UK an attractive place to make films.
"It provides the certainty the industry needs to operate and will help the UK consolidate its position as the most important film industry in the world after the US."
The scheme will also make it easier for BBC Films and Channel 4's FilmFour to finance productions made for theatrical release. There has been major criticism that Britain's broadcasters have not invested enough money into British films.
Andrea Calderwood, managing director of production company Slate Films and vice chair of film at producers' trade body Pact said she was "concerned" about the effect of EU regulations.
They "may seriously endanger the prospects for British and European productions, while giving maximum tax advantages to US studio productions", she said.
"We are sure this is not the effect that either the UK government or the EU intend and we hope to work constructively and urgently with them to address this anomaly."
But Pact welcomed the chancellor's move to give 20% tax credit to films with budgets under £20m and 16% for more expensive blockbusters.
"The new tax credit should provide a real benefit to producers, which clearly reflects the government's commitment to the sustainable production of British films," Ms Calderwood said.
A spokesman for the Treasury said: "We think the new reliefs are a well-targeted replacement for the old system of reliefs.
"They continue to deliver very generous levels of support but are now targeted directly at film-makers, therefore providing better value for money for UK taxpayers and at the same time guaranteeing the sustainable production of culturally British films."
The system of film tax relief was changed because the government said investors were abusing the old regime.
Gavin Hamilton-Deeley, media partner at accountancy firm Deloitte & Touche, said: "Today's announcement will be welcomed by the industry for two reasons. Firstly, it will allow overseas producers to access tax reliefs in the UK, and therefore should continue to make the UK an attractive location for filming, as well as help the UK compete internationally. Secondly, the extension of the proposed reliefs goes further than anticipated and [they] are more generous than expected."
Miles Ketley, a partner in Wiggin, the media and movie law firm specialist, said the announcements would "propagate a self-sustaining movie industry" in the U.K. Ketley and fellow partner Charles Moore, both former U.S. studio executives, also noted it was good news that cash spent on talent filming in the U.K. - for example the salaries paid to stars - would count towards U.K. qualifying spend. "It's a fantastic incentive for the (Hollywood) majors to come over here to shoot," Ketley said.