The UK's new film tax breaks will indeed start Jan 1, 2007, as expected.

The Chancellor of theExchequer Gordon Brown confirmed the date during his annual Pre-Budget Report.The government also confirmed that it will extend the former Section 42 reliefuntil the end of the year.

The new rules givesmaller-budget films a credit of up to 20% and larger-budget films 16%.

The European Union announcedthat it had approved the new tax system, with changes, on Nov 22.

The chancellor also notedthat the UK would introduce stronger penalities for film piracy.The UK's Federation AgainstCopyright Theft welcomed the news that Brown would follow the recommendationsof Andrew Gowers to crack down on piracy, including more funding for TradingStandards enforcement.

The group said: "FACT works with Police and Trading Standards across the UK to ensure that those involved in film piracy arepunished for their actions and we are starting to see some stronger sentencingmeted out by the Courts."