Budget Analysis 2004 - Movie Tax Break
New Tax Break For Movie Investment A new tax break has been announced by the Chancellor for the makers of small films with a budget of less than £15m.
Previously there was a scheme where investors could invest in film and obtain tax relief. This was withdrawn as the Treasury believed that investors were abusing the system. The new credit will mean that any tax credit (very similar to the way some Charities claim tax breaks from people paying to a Charity) will be paid directly to the movie maker rather than the investor.
Our view
This could reduce the amount of money available for investment in smaller budget movies. We assume the older scheme was too successful and raised too much money for British Film and cost the Treasury too much in tax investors to investors. We believe the Film Industry loses and the Treasury coffers gain.