UK tax boost expected for £20m+ productions
EXCLUSIVE: This summer’s VFX consultation could lead to an extended cash rebate for films budgeted above £20m, in a bid to encourage more inward investment to the UK.
Screen understands that productions with a £20m+ budget shooting in the UK could be in line for more lucrative tax breaks.
Chancellor George Osborne yesterday announced that the Government will launch a public consultation this summer on options to provide “further support for the visual effects (VFX) industry through the tax system”.
Sources close to the consultation, including VFX chiefs and a source at the Treasury, confirmed to Screen that an extension of the cash rebate from 20% to 25% for films above £20m will be the key proposal on the table at the consultation and a likely outcome from the discussions.
Currently, only films budgeted-under £20m qualify for the 25% rebate.
Inward investment potential
Among the VFX chiefs Screen spoke to there was “hope”, “optimism” and “expectation” that the tax rebate would be extended, thus potentially luring more big budget productions to the UK, which often book UK VFX and post-houses.
In 2012, spend on inward investment feature films plummeted to £630.6m ($958m) from £1.04bn ($1.58bn) in 2011. The number of inward investment films dropped from 34 in 2011 to 26.
Both the government and industry are looking to return to 2011 levels of spend as soon as possible.
TV tax credit
Numbers are picking up this year and the introduction of the high end TV tax credit could also herald more work for the UK’s renowned VFX sector.
Screen understands there are at least two US-backed TV pilots shooting in Europe that are likely to come to the UK if picked up for series. In addition, one UK-US series is likely to shoot in the UK at the end of the year.
Adrian Wootton, chief executive of the British Film Commission, said at last week’s BSAC summit: “While the amount of demand is still unpredictable, in the US we are already dealing with a high volume of enquiries in relation to TV productions.”
Major US film productions still due to shoot in the UK in 2013 include Guardians of the Galaxy, Jupiter Ascending and Cinderella, with The Muppets 2 currently shooting at Pinewood.
Industry welcomed yesterday’s commitment by the government to further invest in digital skills training, with some VFX professionals increasingly concerned about the loss of talent to rival film-friendly markets such as Canada and holes in the current skills base.
At last week’s BSAC conference, Panavision managing director Jeff Allen warned of a potential “train crash in certain critical areas” unless the UK adequately backs its skills base.
“I can see in a very quick order of time, if we get the same peak in television production that we had in film-making in the UK of two years ago, I think in certain critical areas we will have a train crash,” said Allen.
“At the moment, the only way that this will be alleviated is by bringing people in to help on set and in post-production.
“There are certain positions in the industry which have been identified as critical and spoken about since 2011 but the progress on them has been very, very slow.”
Allen specifically highlighted shortages in stereographers, digital imaging technicians and data wranglers as problem areas.