Tax credits for high-end drama productions and animation produced in the UK were unveiled today as the government signalled its intention to stop domestic projects moving overseas.
The chancellor George Osborne this afternoon gave his annual budget statement, in which he outlined a tax credit system for creative media industries including animation and drama production in the UK.
The scheme is likely to reflect the existing tax credit model available to film producers. This generated spending of more than £1bn (US$1.6bn) in the UK last year.
For drama, the move is expected to amount to tax relief of up to 25% for “cinematic” productions filmed in the UK with a budget of more than £1m per hour, which could boost funding for an individual production by as much as £2m.
Referring to the deal for animators, he added: “It’s the determined policy of this government to keep Wallace and Gromit exactly where they are.”
Bristol-based Wallace and Gromit creators Aardman Animations is among the supporters of Animation UK, a lobby group that has been campaigning for improved conditions for the country’s animators in the face of subsidised international competition.
In drama, Ripper Street, a coproduction from Tiger Aspect, Lookout Point and BBC America, is currently recreating Victorian London on the streets of Dublin to take advantage of tax credits offered in Ireland.
Other shows such as Left Bank Pictures’ Strike Back, Mammoth Screen’s Parade’s End and ITV Studios £11m coproduction Titanic have also been filmed overseas, in South Africa, Belgium and Hungary respectively.
Greg Brenman, head of drama at Tiger Aspect, told C21: “It’s always a challenge putting together a budget on an ambitious project and it’s fantastic to get support from the government to keep projects in the UK.”
Impossible Pictures filmed the last two seasons of its €14m (US$18.5m) prehistoric drama Primeval in Ireland, while Ireland and Malta provided the setting for its latest scripted series, Sinbad.
Jonathan Drake, Impossible’s MD, said: “It cannot be anything other than a good thing. A tax break would allow us to compete on a much bigger world scale. It would make a significant difference and we would also see more HBOs and others coming over and putting work in.
“There are a lot of questions about how it will resolve itself. But the danger is if the broadcaster decides the tax break is a subsidy for them, rather than the producer, and lowers their licence fee accordingly. Then we’re back to square one.”
Germany’s Tandem Communications led coproductions on adaptations of two Ken Follett novels, World Without End and The Pillars of the Earth, both of which were filmed predominantly in Hungary. It has also recently filmed Labyrinth, an adaptation of Kate Mosse’s novel, in France and South Africa.
In all three cases, the large proportion of cast and crew from the UK would have meant that if tax credits had previously been in place, they would likely have been filmed there.
Tim Halkin, chief operating officer at Tandem, said: “The thing that has kept us from doing any kind of work in the UK is the lack of incentives for TV. It hasn’t kept us from going after the acting talent. Without a tax incentive, it’s very costly.
“So it’s great they’re going down that road. There’s a wonderful industry there and a wonderful talent pool. If you can throw in incentives, it will keep business in the UK and attract business from overseas.”
Julian Fellowes, the writer behind Titanic and worldwide hit period drama Downton Abbey, has also thrown his support behind the introduction of tax credits.
While Titanic was filmed in Hungary, Downton, which has a budget of about £1.2m per hour, is a rare example of a big-budget drama filmed in the UK.
He said last week: “British television is second to none but, unfortunately, time and time again great British programmes are being made overseas where the tax climate is more favourable. If the Budget can address this, it would be a fantastic move forward for our industry and the country as a whole, as a host of new productions would undoubtedly be produced here – as they certainly should be.”
Charles Moore, partner at media law firm Wiggin and co-author of a report in January that revealed the UK was losing out to countries that did offer tax incentives to drama producers, added: “Today’s announcement will have an enormous impact on the UK TV industry. High-end TV production is an international growth industry and the new incentive will have a major impact on employment, skills and inward investment in the creative industries throughout the UK.”