Industry receives another shock to funding system
Thinking that the worst was over, the UK film industry received unexpected bad news yet again when limits were announced by Chancellor Gordon Brown this week to the Enterprise Investment Schemes (EIS), a range of tax relief that was seen as being able to offset the elimination of GAAP funding (see news) and the limits on sale and leaseback financing (see news).
The new £2m (nearly €3m) cap on EIS relief in a 12-month period is believed to have come at the request of the European Union, which last year insisted that the UK change its tax incentives to meet common trade rules.
Although the restriction will not affect schemes set up before the legislation comes into effect next year, the UK Film Council is already taking a pragmatic stance on the impact it will have on the industry’s future.
John Woodward, CEO of the UK FC, said: "The fact is that the UK Government has to work within the confines of EU state aid regulation. Of course this is as a setback but we need to let the dust settle on the technicalities, take stock and start to figure out a new way forward for investors."
This limit comes as an especially hard blow to those innovative companies set up in recent years precisely to take advantage of EIS and new forms of tax credit in the UK, most notably Visible Films – a partnership between Samuelson Productions, Ecosse Films and Recorded Picture Company – behind such recent successful titles as Becoming Jane [+see also:
trailer
film profile], Stormbreaker [+see also:
trailer
film profile] and The Libertine [+see also:
trailer
film profile].
Did you enjoy reading this article? Please subscribe to our newsletter to receive more stories like this directly in your inbox.
