High-end TV tax breaks will be a real boost to domestic production but not everyone is guaranteed to benefit, argues Paul Robson
Unless you’ve been living under a rock for the past few months you’ll know that the government is now providing tax breaks for high-end TV production. It’s a scheme that I wholeheartedly support and one that will doubtless provide huge benefits for both the broadcast sector and the UK economy.
However, while there are many, many positives, I am starting to wonder whether the qualification parameters that Her Majesty’s Treasury has set might prevent the tax break from benefitting everyone in the broadcast food chain.
Before we get onto that, a quick update. Although it won’t be passed as law until July the scheme is already up and running, offering a 25% rebate on 80% of the core budget of any drama, comedy or documentary series that costs more than £1m per hour. Each production must spend at least 25% of its money here and the show itself must pass a cultural test.
In principle it’s a wonderful thing. For many years it has been suggested that we need an incentive that will attract overseas producers and also stop big British drama producers from spending their budget in countries – like South Africa and Hungary – that already offer subsidies.
You only have to look at the impact that Game of Thrones (pictured) has made on Belfast to see how influential it could be. The first three series of the HBO fantasy drama, shot in Northern Ireland (NI) and funded in part by NI Screen and Invest NI, generated roughly £65m for the local economy. It provides jobs, business for suppliers and profile.
Keep Calm and Carry On
This sounds great but if you provide post-production facilities I wouldn’t start ramping up your kit inventory or adding additional suites just yet.
Because of the £1m-an-hour floor, not all shows will qualify. There are a whole host of productions in the £600k to £800k budget bracket – including many primetime BBC and ITV shows – that will never get anywhere near that figure even with a lot of back-end finance.
So that means the tax credit is somewhat skewed in favour of big budget US dramas.
Which is fine but while we benefit from a guaranteed 25% of the budget being spent here, because they don’t have to spend all of it, and they can only claim for 80%, they could conceivably still take things like post-production and visual effects back to the US with them or to places that offer credit on 100%.
Similarly, the 25% threshold for UK expenditure might prevent producers coming here to do just their post-production. I think a figure of 10% would have been better.
Hopefully I am wrong, these concerns will not come to pass and, instead, we will start to make even more ambitious and bigger dramas that cost a £1m an hour and sell all around the world. That would certainly benefit everyone.
Paul Robson is managing director of Medialease