UK Government Tightens Tax Relief Rules For Film Makers

by Robin Pilgrim, LawAndTax-News.com, London

29 April 2004

The UK government on Tuesday announced that it will be introducing tighter rules on tax breaks for films produced in Britain, in order to ensure more investment in people and facilities.

Films made by UK and overseas film makers under co-production treaties qualify for tax relief.

Under the new rules, any film from France, Italy, Denmark or Iceland that applies for co-production with the UK will, from 1 July, have to spend 40% of its budget in the UK to qualify.

This represents an increase of 10% from the current level.

Explaining the reasoning behind the clampdown, Film Minister Estelle Morris revealed that too many co-productions were seeking to take advantage of the tax incentives on offer in the UK, whilst failing to deliver the right amount of investment in the country's film talent and facilities.

"We have to make sure the co-production system delivers real cultural and economic benefits to both partners," she observed.

However, the minister revealed that the move is only intended to be a stop-gap solution, and that a wider review of international film co-production treaties is currently being carried out.

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