The Prime Minister, David Cameron, has announced the extension of the film tax relief scheme until December 2015. The scheme, which in the past has helped to find projects such as the Harry Potter films and the currently in production James Bond film, provides tax reliefs of up to 25% of production costs.
To be eligible for the tax relief the production has to be certified as a British production. Reliefs are only available in production costs incurred within the UK and up to a maximum of 80% of the total cost. Companies operating at a loss are able to surrender the relief for a payable tax credit or use it to reduce company tax liabilities. Further details on the scheme are available via the HMRC website whilst the Treasury press release is available here
Industry experts say that the tax relief scheme can make films produced in the UK up to 40% cheaper than those produced in the US. Although the scheme will cost the UK an estimated £95 million per year this is more than balanced by the creation of £1.4 billion per year in GDP. In the tax year 2009/10 the scheme helped 208 films.
The decision to extend the scheme is partly down to its current success. With the help of the tax relief scheme London has become the third busiest city in the world for film production, behind New York and Los Angeles. Six major films are currently in production in the Capital with an average of 35 film crews on the streets each day; all generating jobs and revenue.
The continuing success of the British film industry is good news for those investing in films, either for direct investment or tax efficiency reasons. As tax mitigation specialists Newshams are able to give advice on how investing in films may help as part of an overall tax strategy.
Contact us now on 020 7470 8820 and ask to speak to a tax adviser about the potential tax advantages of investing in films or e-mail us at firstname.lastname@example.org and we’ll get straight back to you.
17 November 2011