U.K. prod'n credit on hold for approval
The delay by the European Commission in ratifying the U.K.’s new production tax credit is sending ripples of anxiety through the British film industry.
But the U.K. Film Council is doing its best to reassure the community that the holdup is neither unusual nor cause for concern.
Alarm bells started ringing when the Film Council was forced to cancel two seminars, scheduled for Oct. 10 and Oct. 20, in which government officials were to explain the tax credit to an invited audience of 450 industryites.
Those seminars were organized in the expectation that the tax credit would have received its rubber stamp from the European Commission by now. Film Council reps now say they are hoping for a positive outcome within the next few weeks.
The European Commission must approve any new system of subsidies or state aid to ensure they are justified by strict cultural criteria.
The process of approving the U.K.’s new tax credit has taken longer than hoped, because the European Commission has been asking for greater clarification on how the British cultural test that sits alongside the tax credit will work.
“It’s a dialogue. The discussions have been going back and forth. It’s not a hostile set of negotiations,” said a Film Council rep. “Of course, everyone from the U.K. end just wants to switch it on, but production is still going on. It’s not like everything has stopped.”
The tax credit, which replaced the old Section 42 and Section 48 tax breaks, theoretically applies to any British-qualifying film that started shooting after April 1 of this year. But producers will only be able to claim the credit once it has been ratified by the European Commission.
That means all films currently shooting have gone into production with finance plans based on the assumption that the tax credit will be ratified without significant changes.