The Chancellor of the Exchequer George Osborne formally launched tax reliefs for high end TV and animation at Bafta this morning.
Bafta was packed full with 200 producers, facilities, agencies, lobbyists and TV and film executives for the event, highlighting the level of industry expectation surrounding the tax credits.
Culture minister Ed Vaizey MP was also at the launch, which was hosted by the British Film Commission.
The presence of two senior government ministers at the event highlights the level of political support behind the tax reliefs, which are viewed as tool for kick starting growth in the flat UK economy.
Osborne said there were two key events that spurred him on to launch the tax credits. The first was a meeting with Animation UK chairman Oli Hyatt. “He made such a passionate case for why British animation is the best in the world and why we were at risk of losing it,” said Osborne. The second came after Osborne watched a British TV drama at home one evening, and noticed at the end that all the credits were for crew and locations in Hungary. “I thought, ‘Why is this production being made in Hungary rather than the UK?’ It struck me as crazy not to be able to do something to change that.”
Vaizey added that HBO’s huge investment into The Game of Thrones, which is filmed in Northern Ireland, was also an important factor in changing the government’s thinking about tax credits – in particular their potential to attract big productions to bolster local economies throughout the United Kingdom.
The tax credits, effectively worth up to 20% of a budget, are modelled on the successful film tax credit which has been used to finance over 1,000 films since it launched six years ago.
Osborne emphasized that the stability of the film tax credit had been crucial to its success, adding that “the constant changing of the credits is not something that I am considering.”
The tax relief has been available for high end TV and animation in interim form since April 1, while the video games relief is still waiting on EU approval. The credits are available to dramas with a per hour budget of £1m and over. Full parliamentary approval of the credits is not likely to be ready until August, so the BFI is issuing interim certificates to productions until then.
Osborne said: “The Government’s industrial strategy is simple: we want to identify Britain’s strengths and reinforce them, so that Britain can compete in the modern global economy. Our creative industries are one of the jewels in Britain’s crown and are just the kind of industry I want to back, which is why we are introducing these new tax breaks to help and promote production in the UK.”
Vaizey added: “The UK’s creative industries are a real success story, worth more than £36 billion a year. We know that the television and animation sectors make a real difference to the UK economy and these new tax reliefs will be instrumental in expanding our potential.”
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