Please wait...
Please wait...

Drama over UK tax breaks

Tax breaks for big budget television dramas produced in the UK are expected to be announced next week – a move that could open the doors to a flood of investment from overseas studios.

Parade's End

Ahead of his budget report on Wednesday, chancellor George Osborne is lining up a 20-25% tax rebate for production costs spent in the UK, which could mean additional funding of up to £2m (US$3.15m) for some high-end series.

This could bring to an end a growing trend of UK series filmed overseas, where tax credits are available, while also leading to an influx of international producers bringing productions to the country.

Titanic, Julian Fellowes’ £11m drama that has pre-sold to 86 countries worldwide ahead of the 100th anniversary of the ship’s sinking next month, was filmed last year in Hungary.

Parade’s End, Mammoth Screen’s period drama for HBO and the BBC, was largely filmed in Belgium. And the Strike Back series, produced by Left Bank Pictures for satcaster Sky1, is one of an increasing number of dramas shot in South Africa.

The tax breaks are likely to be offered to big budget series with costs of more than £1m per hour.

And it is hoped the introduction of such a scheme would help fuel the television industry in the same way the UK film industry has benefited from similar rebates introduced a decade ago.

This led to Warner Bros choosing to shoot the Harry Potter franchise in the UK and overall, has helped to create thousands of jobs and bring in hundred of millions of pounds in production costs.

Simon Vaughan, CEO of Lookout Point, said introducing tax breaks for high-end dramas produced in the UK could herald a “golden age of drama production.”

Vaughan brought together the £11m budget for Titanic, while Lookout’s latest series, a coproduction with Tiger Aspect called Ripper Street, is currently recreating Victorian London on the streets of Dublin.

“If these tax breaks came into play for high-end drama, it puts a whole new complexion on the UK TV business,” he said. “At the moment, it’s very hard to justify shooting drama in the UK when you can go to Ireland and pick up a tax credit.”

James Penney, commercial director of Mammoth Screen, said: “This is a very promising development. If we can shoot more of our big-budget drama in the UK, using brilliant UK crews and facilities then we’d be delighted. Whilst filming Parade’s End in Belgium was good, it would have been great to have done it all in the UK.”

Other UK dramas not filmed domestically include The Tudors and Camelot, which were both shot in Ireland.

But treasury sources suggest a consultation will now be launched by the chancellor to examine what the benefits of such a tax break could be for producers who make shows with a high export value.

In 2010, sales of UK television series to international buyers rose 13% to £1.42bn compared to the previous year, making it the second largest exporter in the world behind the US.

Vaughan added that if the introduction of tax credits were coupled with commitments of investment from domestic broadcasters, the UK could see a “golden age of drama production.”

“If HBO wants to make a show costing £3m an hour, suddenly you can bring half of that by harnessing a UK broadcaster and the tax credit,” he said. “That’s a real contribution and everybody will pay attention. Because our creative industry is so highly thought of around the world, we could enter a golden age of drama production.”

Animation UK, a lobby group representing the children’s cartoon business, has also been calling on the government for financial assistance.

RELATED ARTICLES

Please wait...