TV Tax Credit System Gets Go-Ahead From Euro Authorities
LONDON -- The proposed tax credit system for high-end TV, animation and video games has jumped through the final hoops standing in its way and will be in place on April 1, 2013.
The system is designed to help keep the U.K. on the map with Hollywood studios and producers looking to make big budget TV projects -- likely to be budgeted at $1.5 million plus per episode.
The proposals for the credits had to secure state-aid approval from Brussels before the British government could start implementing the long-awaited tax benefits to applicants.
The go-ahead from Brussels, on the eve of this year's Mip TV market in Cannes, should give producers and program-makers a welcome boost ahead of the show that runs April 8-11.
The tax benefits, which have been in the works for about a year and have been supported by industry groups and personalities, will provide a 25 percent tax break on qualifying U.K. expenditures.
Budget documents indicate that the British government expects to allocate $7 million (£5 million) to its tax credit system for high-end television productions from April 6, 2013 through the rest of the year.
This allocation will likely grow, though, according to government forecasts, to $38 million (£25 million) for 2014 -2015, and to $98 million (£65 million) by 2017-2018.
Stephen Bristow, of the media tax and accountancy firm Saffery Champness, described the green light from the European Commission for the tax credits, as "great news."
Bristow, whose firm has been instrumental in drawing up the framework and lobbying the government bean counters to implement the system, said it will boost the sector in two ways.
"In real terms the U.K. is now going to be able attract more high-end TV production and animation, building businesses and employment," Bristow said.
The tax credits for high-end TV is already thought by British industry insiders to attract more and more U.S. productions with British elements to U.K. shores.
It will also avoid recent "runaway" productions, high-end projects produced by British banners and U.S. partners such as Parade's End, starring Benedict Cumberbatch and Rebecca Hall from BBC Worldwide and HBO, from shooting abroad.
Said Bristow: "The new tax relief will be in place from April 1, 2013, giving production companies just about to start production the confidence to do so, knowing that they are going to be able to apply for the TV or animation tax relief providing their productions meet the qualifying criteria."
The British Film Institute has been tasked by the British government to be the certification body for the incoming tax credit system.
Adrian Wootton, chief executive of the British Film Commission and Film London said: "That the TV tax relief is in place just a year after it was announced is a testament to the government’s understanding of how vital the production industries are to the U.K. economy in terms of job creation and investment. Building on the success of the film tax relief, the British Film Commission is already working hard with our partners both here and in the U.S. to ensure that the U.K. has as much success in attracting major international TV production as we do in attracting major international features."