Yahoo Finance Film studios get tax breaks to make Britain ‘second only to Hollywood’
Film and television studios have been handed major tax breaks in a bid to make Britain’s production sector “second only to Hollywood”.
Business rates for production hubs will be cut by 40pc over the next decade under measures outlined in the Budget to promote investment in new studio space.
The Chancellor said Britain had become Europe’s largest film and TV production centre, playing host to recent films starring actors including Idris Elba, Keira Knightley and Orlando Bloom.
He added that the UK would rank second only to Hollywood for studio space if growth continued at its current rate.
The move was welcomed by media giant Sky, which confirmed it would film the latest instalment of the Jurassic World franchise at its studio complex in Hertfordshire later this year.
‘Tax cuts bring opportunities’
Dana Strong, chief executive of Sky, said: “Today’s announcement brings confidence to the sector, unlocking job opportunities whilst providing a stable foundation for the investments of tomorrow in the UK.”
The new Jurassic World film, which is being made by Sky’s sister company NBCUniversal and executive produced by Steven Spielberg, will be the third major shoot to take place at the studio hub north of London.
Wicked, a feature film adaptation of the musical, starring Ariana Grande, and Paddington 3 were also filmed at Sky Studios.
The Comcast-owned media group has outlined plans to expand the studio complex with 10 new sound stages.
It has said the investment will create 2,000 jobs and bring an additional £2bn of production into the UK in the first five years alone.
The UK has emerged as a major new film and TV hub, with US streaming giants such as Netflix and Disney splashing out on studio space to meet booming demand for new shows.
However, the industry is now facing a slowdown in production amid higher interest rates, as well as the impact of Hollywood writers’ and actors’ strikes.
In the Budget on Wednesday, Mr Hunt also outlined tax cuts for independent British films and visual effects studios.
The Government will introduce a new tax credit for films with budgets under £15m after producers warned of “market failure” amid a struggle to secure funding.
Tax relief for UK visual effects costs in film and high-end TV will be increased by five percentage points, while an 80pc cap on qualifying expenditure will also be lifted.
‘Lifeline to indie film producers’
John McVay, chief executive of Pact, which represents production companies, said: “I’m pleased that the Government has recognised the important role the British independent film sector plays in developing key talent and sustaining jobs across the economy.
“The sector has reached a critical point and this intervention will provide a lifeline to indie film producers by allowing them to access funding which will attract key creative talent and in turn give them the ability to recoup their initial investment.”
Ben Roberts, chief executive of the British Film Institute, added: “This is a dramatic moment for UK film, and the most significant policy intervention since the 1990s.”
The tax breaks formed part of a wider £1bn package to support the UK’s creative industries.
Mr Hunt said the Government would make pandemic-era tax relief for theatres, orchestras, museums and galleries permanent, while the National Theatre will be handed £26.4m to upgrade its stages.
Dame Caroline Dinenage, chairman of the culture, media and sport committee, said: “Today’s announcements are a shot in the arm for our film industry and will help give the sector the certainty and stability it needs to retain the UK’s excellent standing on the world stage.”
