Swift u-turn on UK tax law that could have damaged James Bond productions
09-Mar-2007 • Bond News
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The Treasury stunned the film industry last Friday when it announced it was taking action against complex tax avoidance schemes known as 'sideways loss relief'.
The schemes allow wealthy individuals, working through a partnership, to offset tax against expected losses on a film. Such relief has also been a big part of the attraction for investors to fund such highprofile British films as The Queen and Casino Royale.
But now the Treasury has ditched the plan as officials admitted they had not been aware that a number of films would be affected and the film industry will be exempt from the overall tax avoidance crackdown.
The speed of the move was welcomed by the industry, which had begun lobbying the Chancellor within hours of last week's decision.
The UK Film Council said the announcement was 'great news', but the Tories attacked Mr Brown for creating unnecessary uncertainty.
Shadow arts minister Ed Vaizey said: 'This is a hugely embarrassing climb-down for the Treasury, and is yet more evidence of the 'stop/go' signals that the Chancellor sends out with his constant tinkering.
' The film industry requires certainty, but this is the fifth change in taxation affecting film in as many years. The Chancellor talks about supporting the creative industries, but his actions put all the jobs and hard work at risk.'
Fact, which represents independent film producers, backed the Government's change of stance, stressing that it had 'corrected what we think was an incidental error.'
The group's director of film Tim Willis warned that the current tax proposals would have led to a 'dramatic effect on a number of independent producers.'
Tony Blair lauded London as the 'creative capital' of the world earlier this week and a refusal to back down could have been hugely embarrassing.
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