WA58

Tax break for UK films

The British film industry will receive increased support under a new tax regime announced by Paymaster General Dawn Primarolo.

The scheme will replace the Section 48 relief, which the Inland Revenue believes has been exploited by a number of investors seeking to use the system to avoid paying tax, regardless of a film's prospects of success.

Under the scheme, the following new measures will apply:

• Money will be paid direct to the film-makers, rather than through third parties
• The relief will cover 20% of production costs, compared with 15% under the Section 48 scheme
• The maximum budget of qualifying films will increase from £15m to £20m
• The relief will apply to all production expenditure
• The maximum relief will rise to around £4m.

The new relief will come into effect in July 2005.

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