Great news for the British film industry as the Government?s plans to extend tax breaks are approved by the EU

Great news for the British film industry as the Government?s plans to extend tax breaks are approved by the EU

So what does this mean you may ask? It means that film production companies can claim tax relief of 25% payable towards the cost of production under the scheme.

Where in the past 25% tax relief was only available to movies with budgets exceeding ?20m, the 25% relief now applies to films of all budgets.

But it needed to be passed by the EU under state-aid rules that control government support for companies.

EU state-aid rules control the giving of a competitive advantage to companies through government support.

The support of Chancellor George Osborne was also heard as he said he hoped the outcome of the move would be attracting more blockbuster productions to the UK. He stated, ?Tax credits that support both film and TV production create roughly ?2bn worth of business in Britain. That’s many thousands of jobs in lots of different industries, not just acting but film-making and costume design and set design.?

To put it into perspective, the measure means a British film costing ?40m would get an extra ?1m towards production costs.

MaleficentThe British Film Institute said the expansion of the tax relief put all productions on “a parity” with each other.

Amanda Nevill, chief executive of the BFI, said: “The film tax relief is a key ingredient in the UK’s winning combination of outstanding film-making talent and crews, world-leading studios and facilities, and iconic locations.

“It keeps us competitive on the world stage, and helps grow our economy and create jobs at home.

“We warmly welcome this extension to the tax relief and the government’s continued commitment to the UK’s thriving film industry.”

?8bn of production costs have previously been funded by the tax breaks on films such as Gravity, Maleficent and Harry Potter.

The Treasury said 222 films received such support in 2014.

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Claire Gerrard

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