The UK government has put a dampener on improvements to the UK’s high-end TV tax credit as it responds to the various demands made by the influential Culture, Media & Sport Committee (CMSC) earlier this year.
One of the CMSC’s main recommendations was for the circa-25% tax rebate, which has had a gamechanging impact on the UK industry, to be given a “targeted uplift” for shows costing between £1M ($1.37M) and £3M per hour, with the BFI given the task of conducting “urgent analysis.”
Today’s government response to the CMSC did not match the urgency.
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“There are a multitude of factors to consider when deciding on new tax reliefs beyond return on investment and sector impact, and the government is committed to ensuring that all public money is spent and targeted effectively across the full breadth of the creative industries and the economy,” said today’s report. “The Chancellor makes decisions on tax policy at fiscal events in the context of the wider public finances.”
The report also scotched CMSC demands to require TV productions claiming the credit to report a breakdown of their spending across the UK’s nations and regions, along with benchmarking the credit against competitors twice yearly.
“One of the major attractions of the UK’s tax incentives, beyond their competitiveness, is the ease, simplicity and consistency of the process,” added the government. “The government therefore currently has no plans to introduce additional complexities on reporting spending across nations and regions.”
The government’s approach to the tax credit is not surprising. Last week, Culture Minister Chris Bryant downplayed any improvements to the 10-year-old credit, telling Deadline the current rebate is “very competitive with the rest of the world.”
A 25% tax relief for the print and advertising cost of films claiming the new 40% indie movie credit has also likely been rejected by the government, which was another demand from the CMSC.
The UK drama industry has been struggling this year with what the BBC terms a scripted funding crisis, as American buyers appear to row-back on co-commissions while costs remain high.
The government used today’s response to officially kill off the idea of a levy on streamers in the UK, however, which it said would not meet its goal of “supporting a mixed ecology,” although it stressed it will “continue to engage with major SVoD services, with the independent production sector and with PSBs on how best to ensure mutually beneficial conditions for all parties.”
CIISA funding
Another area of concern has been long-running bullying and harassment issues in the industry following a set of high-profile scandals.
The CMSC had called for the government to explore forcing companies to fund CIISA, the new independent anti-bullying body, which has been struggling to get off the ground.
Culture Secretary Lisa Nandy is a big CIISA fan and is understood to view the body as crucial to helping rid the TV and film industries of long-running bullying and harassment issues, but the government doesn’t appear to be about to make forceful measures.
“We are not currently considering introducing any additional complexities or placing additional statutory burdens on businesses that may both deter inward investment and have an unsustainable impact on smaller businesses,” added the government today.