Friday, July 21, 2017

FUNDING Baby Driver part of £415m tax relief benefit bill

For Indies such as Warp government finance through the BFI (previously the UK Film Council) and the still-operating regional arms of the old UKFC such as EM Media and Screen Yorkshire (significant distributors of EU finance which will soon disappear thanks to Brexit) are absolutely central to their ability to produce feature films. Without money in the form of non-repayable grants there would be no '71, This is England, Tyrannosaur and so forth.

The BBC and Film4, terrestrial public service broadcasters (with Sky, and its Sky Atlantic channel key to Warp's high-budget TV series The Last Panthers) are also crucial at this level of budget, very rarely exceeding £5m ('71 did, at £8m).

For the big six, and their subsidiary production arms, such as Working Title, just as crucial is tax relief, which will typically far exceed the entire budget of Indie films. 20 years after the Tory free market PM Thatcher scrapped the quota system that ensured cinemas screened a minimum proportion of British films (most European countries, notably france, still have such laws in place), the Labour government recognised the struggles of the industry with a range of tax relief measures, that the current Tory government has (reluctantly) kept in place.

The extent of this varies across the UK, with additional relief available in Northern Ireland (though even more is available in the Republic of Ireland), and indeed there is fierce international competition to attract film productions through tax deductions, including several US states offering high levels of relief.

The scale of this tax relief is clear from the report on 2016 payments, hitting £600m in 2016, including WT's Baby Driver. The tests for determining the 'Britishness' of productions are controversial, with minimal cultural consideration, more raw economic factors determining eligibility. If you read the BFI's annual reports (you should - an amazing source of learning) you'll find many clearly American films accordingly categorised as British.

Big-budget films receive increase in tax relief to almost £600m.
The government paid out almost £600m in tax relief last year to the makers of blockbusters including Baby Driver, Star Wars and T2: Trainspotting, as well as big-budget TV dramas including The Crown. 
The payouts were part of £751m that the Treasury awarded in tax relief to films, high-end dramas, video games, animations, children’s TV shows and theatre productions that passed a “cultural test” that qualified them as British. 
The government’s figures showed that the total awarded in tax relief in the creative sector rose by a third year-on-year from £564m in 2015. The test includes criteria such as the cultural content of a production, how much of it is shot in the UK and the proportion of stars and crew who are from Britain or Europe. 
The government’s tax credit system has proved hugely successful in stopping big-budget film and TV productions, as well as talent such as games makers and special effects workers, going to cheaper locations such as eastern Europe or to other countries offering bigger incentives.
It has also helped attract investment from the deep-pocketed newer arrivals on the film and TV scene, such as Netflix and Amazon, which have backed productions in the UK including The Crown, which had a total budget of £100m, and fashion drama series The Collection. 
Last year there were 175 films completed in the UK that claimed tax relief, with the Treasury paying out £415m, up from £339m the previous year. Relief payouts for high-end TV – dramas that cost £1m or more per episode – rose from £104m to £163m. 

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