Do UK tax credits for movies harm the UK film industry and the health service?
August 28, 2011 In a curious story in the Observer 28.8.11, Jamie Doward points out that the UK government gave tax rebates of £338m to movies that ‘encourage smoking’. Cigarettes have been proven to harm the health of the smokers but I believe that the system of film tax credits harms independent film producers in the UK.
The system was designed to bring non-UK films into the UK – inward investment – and in this respect it has been very successful, with the country netting considerable revenue.
But paradoxically, British producers who want to co-produce and need to film outside the UK, are very unattractive as partners for foreign co-producers, because the tax rebate is paid only on money spent in filming in the UK. So if your cast and crew are British, you pay them in the UK, the money goes into their British bank accounts and they pay tax on it, that money is not allowable for the tax rebate as I understand it, because you filmed outside the country.
The government must balance the budget but failure to see that enabling new, young, exciting producers, who are more likely to be working with new, young and exciting writers and directors, is like not training promising British footballers and then having to import ones teams from abroad.
The value of strength in depth among our producers cannot be over-estimated: they are the lifeblood of the film and television industries in the near future. This is one of the reasons the London Screenwriters’ Festival has so many sessions that are relevant to the business of script development and making the producing breakthrough: script writers need active producers and they need a break from the Treasury.
Given the fact that British films can export very well, the modest investment from the Treasury could be repaid many times over. In the meantime what about a tax on films that promote smoking, to be paid straight into the National Health Service?
