U.K. Industry Welcomes Government Plans to Boost TV, Animation, VFX Sectors

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Hollywood studios and U.S. producers are being wooed by an attractive mix of tax credits and skills to bring them to British shores.

LONDON -- The government-backed wooing of Hollywood studios and high end film and television producers to U.K. shores got a warm welcome from the British entertainment sector.

As Britain's chancellor of the exchequer George Osborne, the equivalent of the U.S. treasury secretary, revealed details for the long-expected tax incentives for high-end TV productions, animation and video games and a big boost in visual effects sector training funding, the industry welcomed the government's pledges.

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Media law firm Wiggin, whose clients include UKTV, a joint venture between BBC Worldwide and Scripps Networks International, Constantin Film, HBO and others, was among the leading campaigners for a TV tax incentive.

Charles Moore, a partner in the firm's film and TV group, told The Hollywood Reporter the introduction of the high end tax relief for TV will "transform the U.K. from being a last-resort location to one of the primary international hubs for cinematic TV production."

Moore noted that the introduction of the TV tax credit, designed to help avoid recent "runaway" productions that have seen high end projects produced by British production banners and U.S. partners, such as Birdsong and Game of Thrones, from shooting abroad, is key.

"In a world where tax incentives are a core component of the finance plan of every U.S. TV production company and broadcaster, the U.K. has now introduced an incentive based on its hugely successful film tax relief, which has brought in record levels of inward investment to the U.K. film sector, to supplement the world-class talent, facilities and infrastructure which already exists in the UK. production sector," Moore said.

Minister for culture, creative industries and communications Ed Vaizey said the government's plans were a recognition of the economic contribution to the U.K.'s economy.

According to Adrian Wootton, chief executive of the British Film Commission and Film London, the current film tax relief delivers a return of $18 (£12) for every $1.57  (£1) invested by the government.

Vaizey will be hoping for similar returns from the TV tax credit, noting that the package of measures "demonstrates government’s ongoing commitment to supporting innovation and investing in talent to help keep the U.K. ahead of the game when it comes to creative excellence."

U.K. TV production powerhouse Kudos, the banner whose output includes Broadchurch, starring David Tennant, an example of the sort of high end programming being touted for tax credits now for shows with budgets of $1.5 million an hour, thinks the boost will be two fold.

Kudos COO Daniel Isaacs said: "This new incentive is great news for the U.K. TV production sector and creative community. Not only will it stop British producers chasing the money and taking productions offshore, but it will mean we now jump to the top of the list for foreign producers and U.S. studios looking for a cost effective location in Europe."

The British Film Institute has already been tasked by the government to give approval on applicants as the certification body for the tax credit system for animation, high-end TV and video games.

BFI CEO Amanda Nevill said government plans to pump an additional $7.55 million (£ 5million) into the Skills Investment Fund (SIF) over the next two years was a welcome fillip for the sector.

"The BFI is laying the foundations for future growth by placing skills and innovation at the heart of our five year strategic plan, and this additional support from the government for our key strategic partner, Creative Skillset, marks an important step in future proofing the success of the industry," Nevill said.

And the government pledge to launch a public consultation on options to provide further support for the visual effects industry through the tax system was welcomed.

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Given the recent headlines surrounding the bankruptcy of VFX house Rhythm & Hues, whose recent work includes Ang Lee's Life of Pi, the U.K. industry is wringing its hands with delight over the prospect of a tax credit system for the sector here.

John Graydon, a partner at media accountancy giants Saffery Champness said: "The U.K. government’s commitment to provide further support to its digital content production sectors and consult on options for supporting the visual effects sector, recognizes the U.K.’s international capability in these sectors and the opportunity for growth."

The BFI hailed the move to put VFX house tax credits on the agenda as "vital in ensuring that the U.K.’s already world class workforce retains and grows its expertise to enable these highly skilled and export-oriented industries to remain cutting-edge and world-leading."