Disappointment Expressed At Film Financing Tax Changes In UK Pre-Budget Report

by Jason Gorringe, Tax-News.com, London

06 December 2004

In a statement released following Gordon Brown's delivery of his pre-Budget report on Thursday, Harry Hicks, head of the Film and TV department of professional services group, Chiltern Plc expressed disappointment at the tax measures affecting film financing unveiled by the Chancellor, likening them to using a "sledgehammer to crack a nut".

Mr Hicks announced that he was particularly surprised at the decision to clamp down on double claims for tax relief on the same film, observing that although the government recently expressed its displeasure at illegitimate 'double dipping': "the Revenue confirmed that they have no objection to two claims for relief so long as there is a recognition of income within the transactions".

Other new measures contained within the pre-Budget report included the restriction of film tax deferral to 15 years, the extension of sale and leaseback anti-exit rules for companies that have accessed film tax relief, and the restriction of loss relief for individuals in partnership.

All of the changes in film financing tax law unveiled by Mr Brown last week are intended to be effective from December 2, 2004.

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