Commons Committee Urges UK To Preserve Film Industry Tax Breaks

by Jason Gorringe, Tax-News.com, London

22 September 2003

A report from the influential Commons culture committee has stated that the current level of tax relief provided for the British film industry is "absolutely essential" for its long term health, and has urged the UK government to preserve the system of tax breaks for film-makers known as Section 48.

Calling the issue a key priority for the government, the committee recommended that "the Government commits to an evolution of Section 48 relief, without further sunset provisions, along the lines proposed by the UK Film Council and the British Screen Advisory Council."

"Lead times for decisions about inward investment are long, therefore 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 report warns.

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. According to the Financial Times, the committee has also been informed that 51,000 jobs linked to the film industry are at risk if the removal of tax breaks forces producers to consider other countries as film locations.

"There is no question whatsoever that the industry cannot succeed without some form of assistance," actor, director and Labour peer Lord Attenborough told the Commons committee earlier this year. "There isn't a country in the world, including the United States, India - they have all in some way or another have major fiscal assistance in terms of operating their industry."

"The one thing I am certain of is that until we accept that a form of subsidy, whether a tax concession is accepted as a prerequisite for the British film industry, the British film industry will continue to jump and flop and climb up again and flop again," Attenborough went on to explain to MPs.

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