There has been an overwhelmingly positive response from the UK film industry to the new measures for UK film tax relief included in the Chancellor’s Autumn Statement.
Industry analysts and trade bodies alike have issued statements and made comments applauding the new measures. These follow on from the introduction earlier in the year of the new UK high-end TV tax credit and seem certain to boost everything from co-production to VFX.
“Today’s announcement is more excellent news for the UK’s creative industries,” said Charles Moore, partner at media law firm Wiggin. “The changes will be of particular benefit to the UK post-production/VFX sector, where the increased financial incentive for larger budget films, the reduced minimum UK expenditure level and the expected amendments to the Cultural Test are likely to mean an increased number of films being attracted to the UK to utilise its world-class VFX houses, thereby addressing the current loss of such work to overseas suppliers.
“I think there is something in there for everyone,” commented John Graydon, Partner in the UK accountancy firm Saffery Champness, leading specialists in UK and international film and television tax incentives. “The reduction in (the tax relief UK expenditure requirement)minimum spend from 25% to 10% is going to facilitate more coproductions in the independent sector.”
Graydon also pointed out that the amendments to the rules governing the Cultural Test will make “the gateway to UK relief easier to pass.”
“The additional benefit for larger budget films is very good for our post and visual effects sector,” he added.
Dave Morrison, an expert on film tax credits at entertainment accountants Nyman Libson Paul, said: “‘The proposals make UK locations even more attractive to international films and, in particular, the rate adjustments look good for larger productions considering the UK. The longer term prospects of single a 25% rate from 2015, should the Government’s negotiations succeed, will be another good addition to the UK’s credentials as a production base.”
The measures in the Autumn Statement come after intensive lobbying from the UK’s VFX sector in particular but will have an impact beyond the visual effects sector.
“It is very good news for the industry,” agreed Lisbeth Savill, Partner O’Melveny & Myers LLP. “It was going to be extremely difficult to have a tax credit that just pertained to visual effects…(but) the VFX lobby made a very good point - the way it (the UK tax relief) was structured, there was not much incentive to do the ‘post’ in the UK. That meant a lot of post-production left the country.”
“This opportunity was about the future of the industry as a whole,” agreed Alex Hope [pictured], Managing Director of Double Negative Visual Effects. “What we are seeing is digital technology transforming the way that films are made. The UK has a great strength in this area and visual effects is at the vanguard of it but digital filmmaking sits right across the filmmaking process.”
Hope suggested that the Government’s interventions will help ensure that “the UK in five to ten years time has the most cutting-edge film industry in the world and can deliver that end to end service to its clients wherever they are in the world and also, crucially, to allow British independent filmmakers to benefit from that.” He expressed his confidence that Double Negative’s clients “will see this as an opportunity to bring work that they would not have otherwise brought to the UK to the UK.”
Savill also emphasised that reducing minimum spend to 10% will enhance the UK’s attractiveness as a co-producer.
“That’s something the BFI is really, really encouraging.,” Savill said. She pointed out that the “double whammy” of the BFI’s co-production fund and the relaxed rules the tax relief “should encourage more collaboration on the cultural side.”
“It’s good for everybody,” said Alison Small, CEO of the Production Guild (whose membership is spread across production and post sectors). “The Production Guild welcomes the enhancements which are intended to further support both UK independent, inward investment and co-production films in the UK, along with Digital Visual Effects. More production activity in the UK is great news to our members, who are the most experienced production personnel in the UK and work across all budget levels.”
“We welcome the Chancellor’s ongoing support and the changes announced today which will enable more film productions to access the infrastructure and talent in the UK - driving further investment, skills development and job creation in the industry,” commented Sarah Mackey, CEO of UK Screen Association, which led responses to the Government’s consultation on supporting VFX earlier this year.
The measures come as BFI Chief-Executive Amanda Nevill and Pinewood CEO Ivan Dunleavy have been accompanying British Prime Minister David Cameron on the UK’s biggest ever trade delegation to China.
“Having just come back from China, which is one of the most exciting new markets for film in the world, it’s fantastic that the Chancellor is doing so much to ensure UK film is positioned in the strongest possible way,” commented BFI CEO, Amanda Nevill.
For details on the changes, click here.