U.K. Government Launches Consultation Process for TV, Animation, Games Tax Breaks

Maggie Smith Elizabeth McGovern Downton Abbey - H 2012

Maggie Smith Elizabeth McGovern Downton Abbey - H 2012

UPDATED: The Treasury Secretary warns that without the previously promised incentives for projects in the vein of "Downton Abbey," there is a risk of "valuable productions moving overseas or not being made at all."

The U.K. government on Monday formally opened its promised consultation on a proposed tax break program for high-end TV productions, such as Downton Abbey, animation projects and video games.

The Treasury Secretary said Monday that industry representatives and others can comment on the proposal, first outlined in the budget earlier this year, until September.

It vowed that the incentives, modeled after a long-standing 25 percent tax break for feature films and scheduled to go into effect in April 2013, would address concerns about runaway production.

"The U.K. is a world leader at producing animated programs, high-end television and video games and the government is keen to provide the necessary support to maintain this status," the treasury department said in a post on its web site. "Without government support for these industries, there is a risk that underinvestment will lead to valuable productions moving overseas or not being made at all."

Treasury secretary George Osborne vowed that the incentives offering tax breaks of 25 percent will provide "tax reliefs that will be among the most generous available anywhere."

"High-end" TV shows are defined as those costing £1 million ($1.56 million) or more. Such countries as France and Ireland already offer such incentives. The U.K. is the second-largest exporter of TV content in terms of the number of hours behind the U.S.

To be eligible for the tax breaks, productions must meet a certain "cultural" test and at least 25 percent of the core expenditures incurred by the production company must be for "goods or services that are used or consumed in the U.K.," the Treasury Secretary said.

Josh Berger, president and managing director of Warner Bros Entertainment U.K., Ireland and Spain, on Monday voice further support for the tax breaks. "Alongside the extraordinary creative talent that resides here, the U.K.'s film tax credit has helped fuel the country's reputation as one of the leading centers of film production anywhere in the world and a great place for filmmakers from across the globe to come and make movies," he said. "We believe these new incentives have the potential to do the same for TV production, games and animation, encouraging growth and driving investment, and we look forward to engaging in the government's consultation process in due course."

Warner Bros. earlier this month opened Warner Bros. Studios Leavesden just outside of London, which it hopes to make a major location for film and TV productions.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai