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U.K. eliminates TV tax breaks

The sudden removal of a tax relief scheme for television program-makers in the U.K. has left the British independent production sector reeling. According to John McVay, head of the Producers Alliance for Cinema and Television (PACT), the tax relief has put more than £200 million (US$290 million) of indie production sector money at risk.
June 1, 2002

The sudden removal of a tax relief scheme for television program-makers in the U.K. has left the British independent production sector reeling. According to John McVay, head of the Producers Alliance for Cinema and Television (PACT), the tax relief has put more than £200 million (US$290 million) of indie production sector money at risk.

Introduced in 1997, the tax breaks scheme was intended to stimulate high quality British productions. However, it ultimately cost the British government much more than expected, as television broadcasters took advantage of the tax credits to fund staple-fare programs. The new finance bill, announced in mid-April, put an immediate stop to using the tax breaks to fund TV programs, striking a major blow to a number of doc series.

‘Because the tax break has been removed, it removes working capital that companies had,’ McVay says. ‘So, it will have the effect of depressing the opportunity for people to take risks.’

Among the casualties in the indie community is London-based science and technology doc-maker Pioneer Productions, which put 60% to 70% of its programs through the tax break scheme. When the budget was announced, the company had to stand down 25 staff while it searched for alternative funding. Says Pioneer MD Stuart Carter, ‘We just finished one [project] and were about to go into three new series using this type of finance, and it destroyed that instantly.’ Carter also notes the tax credits helped attract copro partners. ‘We were bringing in millions from North America, because we were able to offer this money. This has potentially stopped all that.’

Baker Street Media Finance used the tax relief to create funds which provided £30 million (US$44 million) in gap financing to the film and TV sector. It can now no longer work on TV projects. Its head, Keith Evans, says the BSMF funding, which amounted to up to 40% of a budget, allowed major series to go forward when broadcasters proved unwilling to fully commission. Notes Evans, ‘We had built up terrific relationships with the likes of Pioneer, and through them with Discovery and National Geographic, where we were looking forward to doing lots of programs over the next few years. Suddenly we can’t do that.’

PACT is lobbying the U.K. government to win concessions for the indie sector, including the restoration of tax breaks for major British productions and relief for projects already in production.

About The Author
Daniele Alcinii is a news reporter at realscreen, the leading international publisher of non-fiction film and television industry news and content. He joins the rs team with journalism experience following a stint out west with Sun Media in Edmonton's Capital Region, and communications work in Melbourne, Australia and Toronto. You can follow him on Twitter at @danielealcinii.

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