LONDON — The U.K. government has toughened up its co-production rules with four countries – France, Italy, Denmark and Iceland – deemed to have benefited excessively from British film tax breaks in the past few years.
From July, any film co-produced with those countries will have to spend at least 40% of its budget in Blighty to qualify for British subsidies, instead of 30% as currently the case.
But Ireland, also identified as a problem partner, has been exempted from the clampdown, presumably because its film community is so inextricably intertwined with the British industry.
The U.K.’s Department of Culture, Media and Sport has been increasingly concerned about the boom in so-called minority co-productions, costing the British taxpayer huge sums of money to subsidize movies largely shot elsewhere.
The number of co-productions has skyrocketed from around 20 a year in the early 1990s to a predicted 175 in 2004.
Co-production treaties are supposed to ensure that a balance is maintained between the countries involved. If a British producer becomes a minority partner in a French movie, for example, then this should be matched by a French producer becoming a minority partner in a British pic, which would then gain access to Gallic subsidies.
But France, Denmark, Italy, Iceland and Ireland have been plundering British tax breaks without returning the favor.
The latest clampdown on four of those countries is described by U.K. film minister Estelle Morris as a “stop-gap measure, not a longterm solution.”
The DCMS is currently engaged in a review of all co-production pacts, with a view to creating “a whole new landscape of treaties, properly geared to the realities and opportunities for film-making today.”
Morris commented, “Co-productions are increasingly at the heart of the film industry. They enable us to pool expertise and make the most of an increasingly global market. We have to make sure the co-production system delivers real cultural and economic benefits to both partners. Too often co-productions have not brought in the work and have not been screened in the U.K.”