Arts Minister Argues Case For Section 48 Film Tax Breaks

by Jason Gorringe, Tax-News.com, London

01 October 2003

UK Arts Minister Estelle Morris has urged the Treasury to renew the Section 48 tax breaks for the British Film Industry when they expire in 2005, although she conceded that the scheme was open to abuse by investors using the system to evade taxes.

"The evidence is that the tax credit has done what it was meant to do. It was a sound investment and it has proved its worth," Morris announced, according to the BBC. "It will be for the Treasury to decide. But I'm quite clear what my role is and...I think (the credit) has got to continue."

Whilst Ms Morris acknowledged that the scheme was open to abuse, particularly by television companies, she said that on balance the case for retaining the tax breaks was overwhelming.

A recent report by the Commons Culture, Media and Sport Select Committee also called for the tax breaks to remain arguing that "the Government must end the current uncertainty plaguing the industry, must do so in a positive manner and needs to do so as quickly as possible."

The tax breaks are available to productions with a budget of up to £15 million and include measures such as 100% tax relief on production costs and script development. Last year, film-making in Britain was worth £533.3 million, and since the Section 48 measures were introduced in 1997, some £2.59 billion has been spent on production in the UK in total.

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