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Dawn Primarolo Unveils New Film Tax Relief

by Jason Gorringe, Tax-News.com, London

22 September 2004

Speaking on Tuesday at a Downing Street reception for leading representatives of the British film industry, the UK's Paymaster General, Dawn Primarolo unveiled new plans for film tax relief in the United Kingdom, which are set to replace the old Section 48 relief, due to expire in July 2005.

Launching the new relief, she observed that:

“2003 was a record year for film production in the UK and employment in the film and video industries has increased by over 75 per cent in the last decade. We now want to build upon the success of the old Section 48 relief in supporting the production of British films and creating investment and employment opportunities in the industry."

She went on to add that:

“This new, more generous relief will ensure that the UK continues to be recognised as one of the best places in the world to make a film.”

The main features of the new tax relief scheme are that:

  • The money will be paid direct to film-makers, not through third parties, so it will be less open to abuse;
  • The relief will cover 20% of production costs compared to the 15% covered by the old Section 48 relief;
  • Films with budgets of up to £20 million will be able to benefit, compared to a limit of £15 million under Section 48;
  • For the first time, the relief will include an added incentive for films to be profitable;
  • The relief applies to all production expenditure, not just that spent in the UK; and
  • The maximum relief which can be claimed on a qualifying film will rise typically to £4 million compared to £2.25 million under Section 48.

The new regime will come into effect from July next year, but details were announced yesterday in order to allow the industry to plan the finances of films in development with confidence about what the tax arrangements will be when those films are completed.

Full details of the UK film tax relief scheme can be found in the Tax-News Resources section

 

 






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