UK film industry breathes sigh of relief over Budget

There were no unpleasant surprises for the UK film industry in today’s British budget. As expected, film tax relief hasn’t been cut. Nor is Lottery funding being diverted away from film.

“It’s a great relief that the film industry has not been adversely affected by the budget,” commented Abigail Payne, a partner at law firm Harbottle & Lewis. “Producers can carry on as normal.” She added that prior to the budget, “the industry had been worried that nothing was safe anymore, not even the UK film tax credit.”

One small change directly affecting the industry concerned “Film Tax Relief: Multi Year Claims.” HM Revenue & Customs is introducing a new measure to correct “an unintended anomaly affecting the amount of tax credit claimable where films are producer over more than one accounting period.” This will have an impact on production companies making films “whose production spans two or more accounting periods and which have some overseas expenditure.” However, the revision will be to producers’ benefit and had already been flagged up in the 2009 pre-budget report.

“Film tax relief remains in force with minor positive changes,”commented Liz Brion, Head of Media Tax at accountants Grant Thornton.”There are some positives there for companies in terms of long-term rate of corporation tax (but) we still don’t have any detail about intellectual property and how they (the Government) are going to deal with incentives for owners and generators of intellectual property.”

Creative Industries Minister Ed Vaizey last week promised a wide-ranging reassessment of Government support for film. However, the DCMS (Department for Culture, Media and Sport) confirmed that National Lottery funding and film tax relief wouldn’t be reviewed as part of this reassessment.

There was less positive news for the video games industry with the announcement today that the industry won’t be receiving the tax relief it has been pushing for.