Britain’s Crown Prosecution Service said today that five people will be charged in connection with a tax relief fraud that allegedly enabled investors in the British film business to offset about £125M in losses. The news comes following an investigation by the UK’s Revenue & Customs, the British equivalent of the IRS, which alleges that between January 1, 2002 and July 11, 2011, a tax break that allows investors to offset losses against other tax liabilities was “abused and dishonestly marketed in order to cheat the public revenue,” the CPS said. “The evidence suggests that the value of allowable losses was falsified, that there was a conspiracy to defraud investors and that documents were falsified for accounting purposes.” The five defendants will each face three charges: conspiracy to cheat the public revenue, conspiracy to defraud and conspiracy to falsify documents, according to the prosecutor. The group has been called to appear in court on June 18. The news comes nearly a year after a brouhaha was kicked up in the UK when Revenue & Customs said that 600 film schemes were under inquiry. READ MORE »
London Mayor Boris Johnson has pledged to invest £2M ($3M) to broaden the reach of Film London, the body responsible for attracting film and TV shoots to the British capital. The org’s remit will be expanded to bring in £200M in additional expenditure and to create 1,000 industry jobs. With the new 25% tax rebate for high-end drama and animation coming into effect this past Monday, the UK is angling to stem runaway production and encourage foreign shows to shoot in Britain. Sam Mendes’ Showtime series Penny Dreadful will be among the first U.S. TV dramas to benefit. But when the tax credit was recently cleared, it stirred fears that the funds ear-marked for the rebate could be gobbled up by U.S. productions employing British talent on UK shores.
Johnson today stressed the importance of both local and foreign productions. Unveiling the plan at Ealing Studios, home to the Downton Abbey set, Johnson said, “We have an unprecedented opportunity to grow this exciting sector to deliver jobs, produce more world class British drama and, above all, make London the city of choice for TV and animation production… Let’s make sure that all future Downtons are filmed on our turf.”
Sam Mendes’ psychosexual horror series for Showtime, Penny Dreadful, will be among the first U.S. TV dramas to benefit from the UK’s newly-approved TV tax relief for high-end productions. Legislation for a 25% tax credit for TV series costing at least £1M per hour to produce — plus animated programs and video games — has been given the state-aid greenlight by Brussels, clearing the last major hurdle before coming into effect April 1. Largely based on Britain’s Film Tax Relief scheme, which has provided about £800M in rebates to more than 800 movies since 2007, the new law requires productions meet a British cultural test. Co-productions made under an internationally recognized treaty may also be eligible, and it’s believed the new regs could inject about $570M into the local industry. But there are concerns that the potential £200M in relief available by 2018 could be gobbled up by U.S. productions that employ British talent on UK shores.
When first announced in March last year, the relief was considered an effort to stem runaway production. Shows like BBC Two drama Parade’s End and the Julian Fellowes miniseries Titanic, were made abroad. Downton Abbey is among the rare exceptions of big-ticket UK shows that have been produced at home, and I’m told it will now look to benefit from the break. But the scheme is also a means to encourage foreign shows to come to the UK. Chancellor of the Exchequer George Osborne consulted both Disney and HBO to lay out the strategy.
Popular British shows like Downton Abbey and Sherlock are closer to getting new tax breaks for shooting at home. The Treasury today published draft legislation outlining a 25% tax credit for qualifying “high-end” TV productions, animated programs and video games. It has also expanded the scheme to cover TV documentaries and responded to certain industry concerns over terminology and eligibility. Largely based on the Film Tax Relief scheme which has provided about £800M in rebates to 825 movies since 2007, the new law will be based on meeting a British cultural test. Co-productions made under an internationally recognized treaty may also be eligible. The UK hopes the incentives will stem runaway production and entice players like Disney and HBO to make more of their premium shows in Britain.
The draft published today (read it here) says the animation rebate will be available to projects where animation makes up 51% or more (down from the originally proposed 75%) of total production cost. It also defines “high-end” productions as programs that cost £1M or more per “programme hour.” But, the term “programme hour” proved ornery and so the government has clarified its position that an “hour” is based on slot time as opposed to actual running time. The law will also exclude certain genres like advertising, discussion programs and news or
Back in March, the UK government said it would introduce tax breaks aimed at animation, high-end TV production and video games. Today, treasury secretary George Osborne has opened a consultation on the matter seeking opinion from the industry to help design the package. “I want the UK to remain a world leader in the creative industries, that’s why I am announcing tax reliefs that will be among the most generous available anywhere. High-end TV, animation and video games production are exactly the kind of innovative, high-tech industries at which this country excels, and the government is determined to support them as part of our efforts to grow this economy,” Osborne said.
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.
Prime Minister David Cameron has announced that film tax relief will be extended for four more years until the end of December 2015. It had been due to expire March next year. The UK tax break is worth 16% of the budgets of Hollywood movies shooting over here, and 20% of the budgets for local films. The news is designed to re-assure Hollywood that the UK is still the place to shoot big-budget movies. Recent Hollywood productions that have shot at Pinewood Studios include Ridley Scott’s Prometheus, Tim Burton’s Dark Shadows and Snow White and the Huntsman. The tax break has been worth $151 million to producers over the most recent financial year, supporting over $1.6 billion spent on 208 UK-qualifying films.
Aardman Animations, the UK company behind Wallace & Gromit, may be forced to make its next TV cartoon series in either Ireland or Germany. Miles Bullough, head of broadcast of Bristol-based Aardman, tells me he may have no option but to produce Ploo, Aardman’s latest $3 million-$5 million pre-school animation series, outside of Britain. This is because unlike Canada, France and other countries, there are no UK tax breaks for animated TV. It hopes Chancellor George Osborne, the politician in charge of UK finances, will announce a tax break later this month. Aardman is lobbying for the UK film tax credit — worth 15%-20% of the cost of production — to be extended to children’s animation. The company must decide whether to make Ploo overseas by the end of March. For a company as British as Wensleydale cheese and afternoon tea, it is a decision Bullough hates having to make. “For us to consider moving overseas is wrong, but unless we get a level playing field we will have to consider going,” he said. “Prime Minister David Cameron and arts minister Ed Vaizey both came to visit and gave us a sympathetic hearing, but you never know with politicians.”
EXCLUSIVE: Fulcrum Media Finance, the London- and Sydney-based film and TV financier, has closed its first wholly British deal. Rachel Weisz stars in Davies’ new screen version of Terence Rattigan’s The Deep Blue Sea. Shooting on the UK Film Council and Film4 backed project begins in November. Tom Hiddleston will play Weisz’s reprobate RAF pilot lover and Simon Russell Beale her stolid husband. Fulcrum is cash-flowing the UK tax credit, worth 20% of the budget. In the movie business, that’s as risk free as you can get.
The financier hopes to finance 24 UK projects a year. Fulcrum is co-owned by Iain Canning and Emile Sherman, producers of Oscar-tipped The King’s Speech. Fulcrum offers to lend up to 95% of the value of the tax credit. Until now the financier has been financing either wholly Australian films or Australian/UK co-productions such as Oranges and Sunshine and Triangle. Canning tells me that UK producers should welcome working with a financier who’s a filmmaker too. Fulcrum says it will undercut banks such as Barclays and Coutts that offer this kind of finance. “As producers ourselves, we know filmmakers just want financiers to be straightforward with them and just get the job done,” Canning tells me.
Australian pension fund Super Media has arranged a A$20 million facility for Fulcrum Media Finance, the Australian film and TV financier. The attraction from Super Media’s point of view is that the money will just be used to cash-flow the Australian …