New tax breaks make UK Film Industry more competitive than Hollywood

Hollywood falls behind again

Today the Chancellor unveiled new film tax breaks for both independent and high budget film productions that are set to make the UK more competitive than Hollywood.

From April 2014, a film production's budget that qualifies for the UK film tax credit will receive 25% relief, and above £20 million, it will be 20%.

In addition to this measure the required UK budget expenditure to qualify for the tax break will be reduced from 25% to 10%. Post production houses will benefit from the new incentives as big budget productions head to the UK to lower their costs while benefitting from one of the world's best VFX industries.

The FT Reports that Visual Effects companies are the fastest growing in the film industry, and demand for special effects continues to rise. Because of this, it's important to make that work competitive in the global marketplace.

In stark contrast, Hollywood faces an uphill battle to bring productions back to the state. with increasingly advantageous tax breaks outside of California, within the US and the UK, producers are venting frustration at the state's inability to keep productions at home.

The California Film Commission currently offers a 20% tax break for feature films with budgets of up to $75 million, but requires that 75% of the total production budget be spent locally. The 25% tax credit is available only to independent films that cost less than $10 million.

There is however momentum in California for a better incentive program although for now it would appear that some senators want to delay or cancel any new legislation to support productions further.