The government have announced an extension of tax relief for UK film companies, which is worth an estimated £95 million annually. David Cameron has extended the scheme until the end of 2015. According to estimates from the film industry, the tax breaks make it cheaper to make a film in the UK than in the US, up to 40 percent cheaper.
The head of the British Film Institute, Greg Dyke said that the film industry would be thrilled by the news, which would create confidence among film makers who were finding it increasingly difficult to obtain finance. Among recent films to have been approved for tax relief are the Harry Potter series, Attack the Bloc and Brighton Rock, a drama.
Expenses which are eligible for the tax relief are usually pre-production, principle photography and post-production, but doesn’t include the distribution or development of the film. A production budget of £20 million or less qualifies for a 25 percent tax rebate on qualifying expenditure, while production budgets of over £20 million can claim 20 percent tax relief.
The film industry generates more than £4.5 billion annually to the UK Gross Domestic product, while £1.2 billion goes to the exchequer. A report produced by the UK Film Council warned that the film industry in the UK may not survive the scrapping of the tax relief. As the industry employs about 36,000 people directly and benefits the same number again indirectly, the film industry can support economic growth.
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