The agreement follows on the new UK tax credit. BBC Films, Film 4, the UKFC and Pact have agreed that the new credit 'should accrue to UK film production companies in order to help achieve the Government's policy objective of creating sustainability in the UK film production sector.'
The practical terms of the agreement say that the 'net value of the UK tax credit created by the 2006 Finance Act, should be treated as the UK producer's equity share in the film, recouping and participating, wherever possible, on a pro rata pari passu, pound for pound basis with other equity funding.'
'This is a real step change for British independent producers,' said John Woodward, CEO of the UK Film Council. 'For the first time, we will all start with the principle that the net value of the tax break (around 10-18% of the negative cost of the picture) belongs to the producer, not the film's financiers. We still have to make our numbers add up, but this is a big shift in attitude and approach from the old sale and leaseback days where the tax subsidy was used solely to the benefit of the financiers to reduce their investment.'