U.K. tax credit gives indies stake in films
EmptyA triumvirate of the biggest public funders in British movies — BBC Films, FilmFour and the U.K. Film Council — have agreed to rules to give indie producers a financial stake in their movies, the trio said Tuesday.
The three, who among them invest more than £40 million ($80 million) annually in moviemaking, said that producers will get "an equity stake" in the movies in which the trio invest.
BBC Films, FilmFour, the Film Council and producers trade body PACT have spent the past few months hammering out a deal to give producers a position against the new-look U.K. tax credit attached to projects.
They said the new system means U.K. production firms will be able to "hold a significant interest in their own films and, as a consequence, be able to attract commercial investment into their companies to the benefit of the whole of the U.K. film industry,."
In practical terms, the three have agreed to endorse the principle that in every British film in which they participate, the net value of the U.K. tax credit created should be treated as the U.K. producer's equity share in the film, recouping and participating, wherever possible, on a pro-rata, pound-for-pound basis with other equity funding.
Said BBC Films chief David Thompson: "BBC Films is really reliant on the talent and competence of British producers. We have a great, great community of producers, and for everyone's sake we really need them to flourish."
Added Tessa Ross, Channel 4 controller of film and drama: "At FilmFour we need our producing partners to be strong, and we hope that this initiative will boost the entire sector and allow producers to move onto even bigger and better things … with us, hopefully."
U.K. Film Council CEO John Woodward described the agreement as "a real step change" for British indie producers.
"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," he said.
But Woodward issued a word of warning. "We still have to make our numbers add up," he said, "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."
Rebecca O'Brien, who produced last year's Palme d'Or winner "The Wind That Shakes the Barley" and is acting deputy film chair at PACT, said the initiative "presents us with a unique opportunity to begin to build viable businesses and to become effective partners in our industry."
She added: "With the public funders standing side by side with the production sector, we now hope to see properly capitalized companies begin to emerge."