BFI reassures industry about UK's film tax schemes after Times scandal story
In a letter to the Editor of The Times, the British Film Institute has sought to reassure international producers that the UK Film Tax Credit is both stable and safe.
The BFI has also issued a statement on its own website responding to press reports last month that suggested certain types of film investment schemes were being used for the mitigation of investors’ tax liabilities.
“It is vital we distinguish between Government-approved tax reliefs, such as the Film Tax Relief and the Enterprise Investment Scheme on the one hand, and tax schemes which have nothing to do with those statutory reliefs and just happen to use film as a vehicle for minimising the tax contributions of individuals, on the other,” BFI Chief Executive Amanda Nevill [pictured] stated.
The BFI is seeking to draw a firm line between the UK Tax Credit and some of the more outlandish film investment schemes that the Times highlighted in its 21st June ‘secrets of the tax avoiders story’: “Screen play: how movie millions are moved offshore.”
BFI sources have confirmed the alarm that the Institute feels over the potential damage that could be done to inward investment in the UK film industry by the ongoing controversy over the tax schemes.
Adrian Wootton, Chief Executive of Film London and the British Film Commission has now issued a statement along similar lines to that of Nevill. “It is vital to underline the fundamental difference between those schemes that fall outside of any specific legislative framework and the UK Film Tax Relief which was specifically established by the Government to help film-makers finance culturally British films, as well as other statutory interventions such as the Enterprise Investment Scheme (EIS) which are designed to enable investors to reduce risk. The British Government has clearly stated its support of both the UK Film Tax Relief and the Enterprise Investment Scheme, both of which have also received European State Aid approval, and there should be absolutely no concern from international producers on this matter,” Wootton commented.
Some observers have pointed out that the same companies whose funds were highlighted by the Times are also heavily involved in the fast burgeoning EIS market for film.
However, the BFI is making it very clear that Film Tax Relief, introduced in 2007, is both fully approved by HMRC and absolutely crucial to the well-being of the UK film industry.
“It is a critical factor in attracting around £1 billion in inward investment into British film per annum, at an estimated annual cost to the Treasury of around £140 million,” the BFI’s statement asserts. “The tax relief also supports UK film production as a whole, such that the industry annually makes a contribution of £3.3 billion to UK GDP, supports 62,000 jobs and directly contributes over £440 million in tax revenues.”
See Screen’s earlier reporting on the Times story here.