Uncertainty Over Tax May Lead Hollywood To Shun The UK

by Robert Lee, Tax-News.com, London

13 April 2005

The ongoing uncertainty surrounding tax breaks for film productions staged in the United Kingdom could result in many big-budget productions moving abroad in the future, it has been reported in the national media.

It has been widely reported in recent times that the attractiveness of the UK as a production location is being challenged by the government’s decision to tighten up the tax regime relating to the financing of film production which, coupled with an uncertain future over the Section 48 tax breaks and the strong pound has prompted a fall in the number of foreign films being shot in Britain.

According to the Daily Telegraph, the recent decision by the producers of the £67 million project The Watchmen to halt production at the world famous Pinewood Studios, located just outside London, attests to the increasingly unfavourable tax and cost climate.

Producer Lloyd Levin was quoted by the paper as saying the “loss of certain rebates” in the UK along with the weak dollar in relation to the pound had forced Paramount to explore alternative “shooting scenarios.”

The ongoing uncertainty surrounding the longevity of tax breaks for the film industry in the UK has also sparked speculation that Warner Brothers will switch production of the fifth Harry Potter movie, The Order of the Phoenix, to the Czech Republic from Scotland and Leavesden Studios in Hertfordshire.

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