Government extends tax breaks for British film industry

Accountants may be interested to learn that the government has extended the British film industry’s tax breaks until the end of 2015.

The tax relief is applied on expenses incurred during the production of films. In order to qualify, films need to undergo an eligibility test. At least 25% of the total production expenditure must be incurred in the UK and the film must be certified as British. This could be either through a cultural test or an agreed treaty.

In a film passes the eligibility test, tax relief can be claimed on 80% of the film’s budget.

David Cameron said he was delighted to extend film tax relief, guaranteeing the British film industry millions of pounds worth of support over the next four years. The British film industry has been extremely successful in the past year and the PM looks forward to seeing the industry thrive over the next few years.

Recent British film successes include Attack the block, Brighton Rock and the final Harry Potter movie – Harry Potter and the Deathly Hallows.

Meanwhile, Sir Alex Ferguson, the manager of Manchester United, is involved in a tax tribunal hearing.

Ferguson and Sven-Goran Erikkson invested on a scheme to buy the distribution rights for two Disney movies. The 250 members of the scheme say they made massive losses on the investment, and they could offset the losses against their income in order to reduce their tax bills.

HMRC is challenging the claims and the tribunal is due to deliver its findings shortly.

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