UK aims to be go-to destination for high-end TV productionNew tax breaks mean that the television and animation sector can obtain 20% off production costs from the UK taxman.
A new tax relief is expected to have a transformative effect on the UK TV industry. Combined with its world-renowned skills and talent base, the relief will make the UK among the world’s most attractive destinations for high-end TV production, providing an important boost for the economy and creating thousands of jobs.
The change has already attracted the interest of major US television production companies and high-end television producers from around the world.
The UK is renowned throughout the world for its high-quality television drama, based on a wealth of writing, directing and acting talent. However, the absence of UK tax relief for high-end television – similar to those available in Eastern Europe and countries such as Ireland, Canada and South Africa – has led many UK production companies to make their programmes outside the UK. The huge international commercial and critical success of Carnival’s Downton Abbey is an anomaly. For script reasons, the series had to be made in the UK. However, the majority of recent high-end culturally British TV dramas have been filmed overseas: Titanic was produced in Canada and Hungary, Parade’s End was filmed mainly in Belgium, Strike Back mainly in South Africa and Camelot and The Tudors in Ireland.
The generous new tax relief for high-end television production and animation was introduced on 1 April this year. It offers 25% of UK core expenditure, up to a cap of 80% of total core expenditure. This means that for a production where 80% or more of total core expenditure is incurred in the UK, the payable tax credit will be 20% (25% of 80%). The new relief is modelled on the success of the existing UK film tax relief, introduced in 2007.
Spearheading the campaign
Over the last 18 months the Film and Television team, at Saffery Champness, a member firm of Nexia International, in partnership with UK law firm Wiggins, has been heavily involved in preparing the groundwork for the tax relief. This has involved putting the case forward to the UK Treasury and working with the UK authorities to fine-tune the legislation and gain State-aid approval from the European Union.
The firm has had a leading role in the TV Coalition, which was created to back the tax incentive proposals and is made up of leading UK production companies, inward investors, unions and trade bodies.
Research conducted by Saffery Champness, along with leading UK and international producers, suggests that the UK tax credit for scripted TV production with a minimum budget of £1m will result in approximately £350m per year of extra UK TV drama production. Using the accepted industry ‘multiplier’, this will boost the UK economy by around £1bn per year.
Given the suitability of TV drama for regional production, this will have a substantial impact throughout the UK. Productions often run for a number of series, with significant investment in the local economy, creating jobs and keeping local skills at the cutting edge. The effect that a returning high-end TV series can have on a regional economy is amply demonstrated by Game of Thrones, which is shot in Northern Ireland and has had a significant effect on the local economy.
For UK producers struggling to make high-quality productions in their home country, the new tax incentive means a simpler financing structure, reduced costs of travelling to overseas locations and stronger ties with UK financiers. It will also make it easier to retain valuable IP rights and maximise revenues.
For more information, contact:
Saffery Champness, UK
T +44 20 7841 4270