Wednesday 29 Nov 2006 - 10:11
The European Commission has given State Aid approval to the new film tax reliefs.
According to a statement from the UK Film Council, this tax relief will mean that for films that cost up to £20 million, the Film Production Company (FPC) will be able to claim an enhanced deduction of 100 per cent with a payable cash element of 25 per cent of UK qualifying film production expenditure. For films that cost over £20 million, the FPC will be able to claim an enhanced deduction of 80 per cent with a payable cash element of 20 per cent of UK qualifying film production expenditure.
The UK government meanwhile has published further information on the revised cultural test.
The revised cultural test will come into force once it is approved by the House of Commons and House of Lords, which, Parliament allowing will be January 1, 2007.
According to the UK Film Council the effect of the changes from the previously published cultural test see the Cultural Content section increased from 4 to 16 points; the Cultural Hubs section reduced from 15 to 3 points; and the Cultural Practitioners section reduced from 13 to 8 points.
In addition a new section has been added, Cultural Contribution, to which 4 points have been allocated. The total number of points available is reduced to 31 but the required pass mark of 16 remains unchanged, subject to a ‘golden points’ rule as follows:
A film scoring all 15 of the points available in sections C, D and A4, and less than two points in section A1 and less than two points in section A2, must additionally obtain the points in section A3 to pass the cultural test. If a film scores two points in section A1 or two points in section A2, it will not require the additional points from section A3 in order to pass the test.
The DCMS revised Guidance on the cultural test which explains how it will work is provided at Test Guidance.
In order to qualify for relief, all films will have to pass the criteria set out by HM Treasury.
Lynn Wright
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