Tax breaks for British films not enough says leading tax expert

“The British Film industry has suffered from the loss of finance from film funds that previously relied on generous tax reliefs for individual film investors” said David Brookes, Tax Partner at BDO. “Film production is a risky business and I would like to see additional tax reliefs to encourage outside investment that will stimulate British film production activity. The current tax breaks for British films are not enough.”

The Oscars on Sunday are expected to bring further acclaim for the multi-BAFTA winning British film "Slumdog Millionaire". These accolades underline the quality and importance of the British film industry and come on the back of a fantastic year for British films at the Box Office with Mamma Mia! and Quantum of Solace together bringing in £120 million.

However, the accolades and box office successes hide the fact that the number of British films being made in 2008 and the production spend were both down on 2007. Spend on film production was down by 23 per cent according to UK Film Council figures released last month. This is a concerning trend for British film going forward, as it looks to suffer unduly compared to the wider economic problems.

David concludes: "This year will be a tough year for film producers in the UK with funding becoming more and more difficult to raise, particularly from the banks. The previous tax reliefs have been replaced for British qualifying films but these do not help to encourage outside investors as much as we would like. One possible solution however could be to enhance the existing Enterprise Investment Scheme (EIS) tax reliefs for individual investors in unquoted trading companies."

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For more information or to chat with David Brookes, please contact Matthew Longbottom at BDO on 020 7893 2717 or email matthew.longbottom@bdo.co.uk

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