LONDON — British producers are urging the U.K. government to extend the new film tax credit to include British films shooting abroad.
The tax relief, worth 20% for movies under $38 million and 16% for bigger films, now is restricted to money spent within the U.K.
That means the salary of a Hollywood star shooting a big-budget studio movie at Pinewood qualifies for the rebate, but a U.K. cast and crew shooting a movie in Africa for a British production company would not.
The Producers Alliance for Cinema & Television, which represents producers, welcomed the news that the European Commission has finally approved the tax credit. But it said other European countries have tax incentives with a wider definition of national expenditure to include movies shot abroad.
“It’s a relief for everyone that the tax relief can now become a reality,” said PACT director of film Tim Willis. “The new system potentially provides a real cornerstone to establish the conditions for a sustainable production sector, and we look forward to working with industry stakeholders to ensure that the tax credit enables British production businesses to maximize their participation in the success of their films.”
The EC has imposed major changes to the cultural test that underpins the tax credit, to ensure the benefit goes only to genuinely British films.
The revised test gives far more points for British content and cultural contribution. But the number of points for using British facilities — studios, special effects, post-production, music, etc. — has been drastically cut.
The updated legislation now will go back to the U.K. parliament for formal re-approval in the next few weeks, and is expected to come into force beginning Jan. 1.