The West Midlands film industry is celebrating tax credit boosts. Roger Shannon, producer at swish, the Birmingham -based production company, explains why...
The news that the Chancellor of the Exchequer has set the value of the new tax credit for lower and higher budget films is a positive sign that the waiting game and the hiatus in UK film production will soon be over.
Complementing the tax credit news is also the DCMS's ( Department for Media and Culture) new structure and formulae for a ' cultural test' to determine the definition of a British film.
Beginning in April 2006, the new tax relief will be worth 20 per cent for films with budgets up to #20 million and 16 per cent for films above #20 million.
The DCMS's 'cultural test' will define what a British film is, and therefore which films are eligible for the new tax relief system.
As I understand it, there will be a points formula based on a number of criteria - the content of the film; the talent contracted; the technicians employed etc. If you get 50 per cent of the total points available, the film will be 'certified' and recognised as British.
Taken together (tax credits and cultural test), they set the framework that I think will lead to more UK specific and home grown movies being made.
They maintain the UK film industry as a destination and location of choice for international high budget films, bringing inward investment to the regions and nations of the UK.
And thirdly, they contribute to the further expansion and advancement of the industry's skills infrastructure.
These changes should also help us get more films produced in the West Midlands as the tax relief of 20 per cent will benefit the lower budget film ( i. e less than #20 million ), which is the type of film that characterises film activity in this region, whether developed by indigenous producers or attracted inwards by regionally specific film financing initiatives. The news that the tax credit may also be applicable to a "slate" of films is a further sign that the Treasury has been listening closely to what the industry has been saying as for too long producers have been hamstrung by the short termism of "one project at a time".
One regret is that there is no provision for an accelerated tax relief that would benefit regions where their level of film production activity is under developed.
But, that's nit-picking, when the scene is now set for a much sounder basis for both the producing of independent British films and the increased attraction of the UK for the bigger budget American studio films.
Tax deal makes cut for film industry
The Government has set out details of a new test aimed at ensuring British films provide a genuine lift for the domestic film industry, UK audiences and the economy.
Under the new "Cultural Test for British Films" a points system will be introduced to provide a definition of what exactly constitutes a British film.
To qualify as British, a film must past a test made up of three main categories.
In his pre-budget report, Chancellor Gordon Brown last week said he would increase support for British film producers by guaranteeing tax credits worth 16 per cent for films with budgets of #20 million and above.
Films with budgets below #20 million would receive tax credits of at least 20 per cent.
A Government spokesman said it was expected that all films applying for the new tax incentives would have to meet the new rules.
The three main categories - unveiled by creative industries minister James Purnell - are:
* Cultural hubs - is the production and filming based in the UK?
* Cultural practitioners - do the cast, crew and/or producers come from the EEA ( European Economic Area)?
* Cultural content - is the film set in the UK, are the characters British?
The current British film definition is based on spend.
At least 70 per cent of a film's production costs currently has to be spent on film production activity carried out in the UK in order to qualify.
The flexibility of the new system would allow producers to clock up points if they use UK content, facilities and personnel.
But is not intended to penalise them if they look to source some of their filmmaking outside of the UK, a spokesman said.
Mr Purnell, announcing the scheme, said: "One thing the cultural test is not, is an attempt to dictate the content or subject matter of British films.
"Mrs Henderson Presents or Pride and Prejudice could qualify, but so too could Batman Begins based in Gotham City, but filmed in the UK, employing Brits and using British facilities."
John Woodward, chief executive of the UK Film Council, said the new test provided a simpler way to assess British films for the purpose of accessing tax breaks.
He said: "It will, therefore, help all filmmakers, whether they are making low budget or high budget films by providing a robust and transparent mechanism to assess whether a film qualifies as British.
"The new test will also be more comprehensive in its approach to assessing both the economic and cultural contribution to the UK that the British film industry delivers and will give filmmakers and financiers certainty about how their films can qualify and therefore access the tax incentives."