New tax breaks for UK films

It's good news for the film industry as the Chancellor announces film tax reform.

Dec  6 2005

Chancellor Gordon Brown has unveiled tax breaks that could rejuvenate the film industry in the United Kingdom.

In his annual pre-budget speech, the Chancellor announced tax relief of 16% for films with budgets above £20 million and 20% for films below that figure.

The new scheme was welcomed with enthusiasm throughout the industry, with Adrian Wooton, CEO of Film London, speaking of his delight at the new proposals.

'This is fantastic news for the London film industry' he said. '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.'

The rates will only apply to money spent in the UK (and not the entire budget), while films will have to pass a cultural test to receive the tax breaks, which involves a combination of location, setting, characters, subject matter, visual effects, music, cast, crew and the like.

However, Creative Industries Minister James Purnell said that the industry needn't worry about this element of the proposal.

'The cultural test is not an attempt to dictate the content or subject matter of British films' he explained. ''Mrs Henderson Presents' or 'Pride & Prejudice' could qualify, but so too could 'Batman Begins' – based in Gotham City, but filmed in the UK, employing Brits and using British facilities.'

The new scheme will take affect from April 1, 2006.

• 
•