U.K. Government Ups Film Tax Credit for Big Pix

U.K. Government Ups Film Tax Credit

Measures should attract more Hollywood pix to shoot in the U.K., and benefit U.K. indie films

LONDON — The U.K. government is to increase the tax credits for bigger-budget pics, which will benefit many Hollywood movies. Other changes will benefit U.K. indie pics. The VFX sector, in particular, should receive a boost from the changes.

The government will make relief available at 25% on the first £20 million ($32.7 million) of qualifying production expenditure, and 20% thereafter, for both small and large budget films, from April 2014.

Previously productions with a budget of £20 million ($32.7 million) or less could apply for a 25% tax rebate, while pics with a budget higher than that could claim only a 20% rebate.

George Osborne, who as Chancellor heads government finance policy, announced the measures in Parliament on Thursday.

The government will also reduce the minimum U.K. expenditure requirement from 25% to 10%, which will help U.K. independent production companies by encouraging minority co-productions.

It also will “modernize the cultural test,” which will be expanded to allow for European as well as British culture.

It will also increase the rate of relief to 25% for all qualifying expenditure in 2015.

The government announced that it would invest £5 million ($8.17 million) in the National Film and Television School’s Digital Village to expand and upgrade its existing facility into a world-class training center.

Adrian Wootton, chief executive of the British Film Commission and Film London, said: “The U.K. is home to world-class filmmaking talent and expertise, which help drive the industry forward, as demonstrated recently by the U.K.-produced and critically-acclaimed ‘Gravity.’

“However, in order to continue to attract business to the U.K. in a fiercely competitive global marketplace, our industry must be underpinned by effective fiscal incentives. The tax relief was a game changer when introduced in 2007 and today’s announcement ensures we can continue to grow our industry, boosting the U.K. economy and creating British jobs; it will also encourage the production of more culturally British projects.”

British Film Institute CEO, Amanda Nevill, commented: “Having just come back from China, which is one of the most exciting new markets for film in the world, it’s fantastic that the Chancellor is doing so much to ensure U.K. film is positioned in the strongest possible way.”

John Graydon, partner in the accountancy firm Saffery Champness, specialists in film and television tax incentives, said, “Today’s news will make it easier to make films in the U.K. The changes means that large-budget films will receive more tax relief and find it easier to qualify. The new measures more closely reflect changes in the filmmaking process, which have a direct bearing on international producers and their decision-making in bringing VFX work to the UK.

“The U.K. has all of the key elements for attracting international film production and the first three quarters of this year has seen growth of 28% in the level of inward investment film production. Ensuring the U.K.’s financial incentives support its creative and digital technology expertise and capabilities underlines the U.K.’s positioning as world leader in this international business and its potential for growth.

“In addition, lowering the minimum U.K. spend requirement to 10% and adjusting the cultural test will allow more productions to come to the U.K., and will also help U.K. independent production companies develop co-production partnerships, and in turn open up creative and commercial opportunities for U.K. companies, cast and crew.”

The amendments to the tax credit should boost the number of Hollywood pics bringing their effects work to the U.K. Among recent Hollywood pix to use U.K. VFX facilities were “Hunger Games: Catching Fire,” “Rush,” “Gravity,” “Fast & Furious 6,” “Thor: The Dark World” and “Captain Phillips.”

Alex Hope, managing director of post-production house Double Negative (“Hunger Games: Catching Fire,” “Thor: The Dark World,” “Captain Phillips”), said: “Adjusting the film tax relief so that it reflects changes in the production process will enable the U.K. industry to capitalize on its strengths in VFX and cutting-edge production technologies. This makes financial and creative sense.

“Digital technologies have transformed the filmmaking process, and will continue to do so, giving film-makers new ways to tell their stories. VFX sits in the vanguard of these changes, with increases in VFX budgets from between 10% and 50% of the overall budget. This can be £20 million-£25 million on just one film.

“It is vital that the U.K. has an integrated approach to the digital future of the film industry. The government has recognized this with the support announced in April’s budget for R&D into digital content production through the Technology Strategy Board, and support for skills development in the sector, through the Skills Investment Fund.

“Today’s announcement is crucial in giving VFX companies confidence to continue investing in their U.K.-based operations and generating further growth for film and the creative industries.

“Over the past 15 years the U.K.’s VFX businesses have made significant investment in infrastructure, skills and training and the U.K. has established itself as a global center for VFX, winning Academy Awards, and securing further incoming production business.

“The U.K. film industry has benefited from being able to offer a complete service covering all aspects filmmaking activity, but until today’s announcement the structure of the tax relief, whilst attracting production activity to the U.K., has resulted in some films shooting in the U.K. taking VFX work overseas.

“Today’s measures target the integral role of VFX in filmmaking and productions that would not otherwise qualify for tax relief and incentivize them to bring VFX or production business to the U.K., representing a significant growth opportunity for the U.K. film industry.”

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 6

Leave a Reply

6 Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

  1. The Movie companies will be happy to pocket your citizens money until someone else offers them a better deal. Then all the money you spent building facilities will be wasted and your VFX artists will all be out of a job and you will realize they got the best of you for cheap! Does no one learn from history these days? Subsidies don’t work, they will just bleed you dry, until you are all broke.

  2. blah says:

    The person reporting this as if it’s great news is obviously not well informed or even in the game…I can imagine as a spectator it must be an awesome experience to watch the race to the bottom, though. This is just a story….are reporters responsible for getting facts straight these day?…..you did some surface scrubbing to come up with these tidbits. What happened “over the past 15 years” is now irrelevant.

    Why don’t you visit this site and get informed before you report on things you don’t understand!
    http://vfxsolidarity.org

  3. MC says:

    It’s amazing to me that any municipality wants to chase the VFX business like this. Ironically, the business they try to attract is ruined by the subsidies themselves: any concept of meritocracy in the VFX biz is crumbling with every dollar spent.
    Step on the gas, gents. We’re racing to the bottom!
    Aren’t there better industries to invest in?? How about spending money on developing new businesses locally (a la Silicon Valley) which won’t then be forced to move overseas the moment the subsidy spigot is shut off?

  4. helmethair says:

    Oh great, as if we weren’t shooting enough there already. Every stage in the UK is already fully booked and they’re still getting more money to shoot there.

    • kyoseki says:

      They’ll still shoot on the stages there and do the VFX work in Canada.

      Canada offers tax credits of well above 25% for VFX work, which is why some UK VFX studios have relocated their workforces there.

  5. me says:

    And the race to the bottom continues…

More Film News from Variety

Loading