The UK government today launched a review of its international co-production treaties in a bid to crack down on filmmakers accessing tax relief while only spending a small proportion of the budget in the country.
The culture department, which will carry out the review with support body the UK Film Council, also confirmed that it is doubling the minimum UK spend on co-productions with Canada to 40% after widespread abuse. The review kicks off with guidelines which were issued today updating co-production rules.
"Co-production is central to the future of the British film industry and the UK can lead the way," said films minister Estelle Morris. "But it is a two-way deal. Co-productions and the associated tax breaks must lead to more jobs in film in this country and more work for our film making facilities."
Since launching tax support under Section 48, which allows investors to claim tax relief on 100% of a budget, wherever it is spent, the UK has boomed as a co-production partner. In the early 1990's approximately 20 co-productions were made each year; this year will see around 200 UK co-productions.
The overhauled regulations herald a tougher approach to co-productions, seemingly giving the culture department greater discretionary powers to clamp down on offenders. Although mostly a statement of existing practice, the guidelines tighten up areas such as deferral payments and the reliability of auditor's reports. They now require applications to be received four weeks before production starts.
The review is also to make recommendations for new international treaties aimed at fostering intra-industry co-operation. The Film Council has separately been building relations with India and South Africa, which currently do not have bi-lateral film co-production treaties with the UK.
"I am determined to ensure the right people are reaping the benefits and we will be monitoring the system to ensure just that," said Morris. "That's why I am launching this major review and up-dating the existing guidelines, to ensure the system is delivering on the shop floor, where it counts."