THE LAST BRITISH CHRISTMAS BLOCKBUSTER?

IF NEXT year’s British Christmas blockbuster film isn’t off the drawing board and rolling into production already, the chances are it won’t be produced at all, according to Baker Tilly, business advisers for the media industry.
On July 2, 2002, a film friendly tax break, the 100 per cent write-off of expenditure on films under a sale and leaseback arrangement, will go spiralling to the cutting room floor.
Only films that are already in production will be able to benefit. Any film ideas conceived now have already missed the boat on tax treats and could miss out on necessary investment also.
Harry Hicks, Partner and Film Industry Specialist at Baker Tilly, said: “There will be a race to rush films through before the deadline. Films finishing after this date will only be able to claim the 100 per cent tax back on expenses incurred before that date. All the big budget films are going to happen in the first half of next year, meaning that the production studios are going to be booked out, all the best technicians will be snapped up, and everyone who’s anyone in the industry will be off on expensive location. Also, with the focus on beating the clock, attention to detail may slip, and we could end up with a series of poor quality films.”
Tempted into the market by a one-off investment in the past, investors had begun to leave their money for re-investment in the next film project.
Hicks warns: “The disappearance of this tax break, coming at a time when the city’s antipathy to the film investment was beginning to reduce, is a real blow for the industry. Wealthy individuals and other investors who were becoming fans of the industry may be turned off by the end of this benefit.”
The tax break was introduced three years ago for three years as part of a Government initiative to support British film makers. In 1999, the incentive was extended for a further five years, disappearing in 2002.
The Department of Culture, Media and Sport (DCMS) are said to be keen for the benefit to be extended again, but the Inland Revenue do not agree with the scheme, seeing the write-off as lost cash in the coffers.
(CD)