British Animation And High-End Drama To Get Tax Relief Under New UK Budget

As expected, UK Chancellor George Osborne announced the introduction of a tax incentive for big-ticket British drama series while unveiling the nation’s new budget to the House of Commons today. In somewhat unexpected news, he also announced that tax relief would become available to the animation and video game sectors beginning in April 2013. The treasury chief then drew guffaws — and groans (see video below) — from the benches when he added: “Because, Mr Deputy Speaker, it is the determined policy of this government that we keep Wallace and Gromit exactly where they are.” Order then had to be called. Parliamentary jocularity aside, this is good news for the British animation industry, which has suffered its share of runaway production in recent years. The government is also hoping both the drama and animation incentives will “attract top international investors like Disney and HBO to make more of their premium shows in the UK,” Osborne said.

Exact details of the schemes have yet to be unveiled, although they are expected to resemble the tax credit already in place for film — meaning relief of up to 25% for qualifying productions. Osborne’s announcements were hailed by industry groups including the British Film Commission, the Directors UK guild, Pinewood Shepperton Studios and the TV Coalition — which counts UK and international companies like Ecosse Films, Carnival Films, Red Arrow Entertainment, HBO, Starz, Showtime, ABC/Disney and RHI Entertainment among its members. In a statement, the coalition noted “The announcement could put an end to the exodus from the UK of dramas telling a British story. Shows such as Birdsong, Strike Back, The Tudors, Camelot, Parade’s End and the Julian Fellowes drama Titanic, were all made abroad in countries including South Africa and Canada in the last year to take advantage of tax incentives.” For its part, Fellowes’ Downton Abbey is shot in the UK. If other shows follow suit, a recent RSM Tenon/Wiggin LLP report estimated that the drama tax break would generate an additional £350 million in annual production spend. The video of Osborne making the relative announcement is below, courtesy of ITN: