Chancellor George Osborne has announced plans for the introduction of tax relief for the UK’s video games, animation and high-end TV production industries in today’s Budget.
The Government’s decision to incentivise UK production comes after a high-profile campaign from the TV Coalition, which consists of numerous industry figures and associations including Directors UK.
The government is aiming to introduce the tax relief from April 2013, subject to state aid and a consultation period. The incentive will take a similar form to the UK Film Tax Credit currently in place, which has implemented a cultural test to ensure productions qualify as British.
The move comes after such high-profile British dramas as Birdsong (pictured right), Strike Back and the forthcoming Titanic were forced to shoot overseas due to the high costs associated with filming in the UK. Meanwhile, the makers of hugely successful US series Game of Thrones chose to shoot in Northern Ireland, where a tax relief system is already in place.
Based on research produced by RSM Tenon and law firm Wiggin, it is estimated that “the benefit of a new incentive would be £13 to UK GDP for every £1 of tax relief given. In other words, based on a spend of £350m per year and a tax incentive of 20% of UK spend, this would mean a total return of approximately £1 billion per year.”
In a statement released earlier, Directors UK welcomed the announcement. CEO Andrew Chowns said,
‘This announcement is a great boost to the UK production industry and one which will allow us to compete internationally and bring work back into the UK. We signalled our concern last year to the DCMS about the move of productions out of the UK and we are delighted that government has listened to the proposals from the industry and is putting measures in place which will encourage investment and growth in the creative industries and offer employment opportunities for a wealth of home-grown talent.’