Tax blow hits British film industry

Britain's booming film industry is braced for a potentially crippling crisis and hundreds of job losses today after a shock move in which the Inland Revenue scrapped a tax loophole.

For the first time more than £1billion was spent on making films in Britain last year. That figure could be halved this year if the Inland Revenue does not find a compromise after meeting the Film Council this week.

It is understood 25 films poised to begin shooting could be cancelled unless they are refinanced. They include Tulip Fever, starring Jude Law.

The first victim is likely to be The Libertine, starring Johnny Depp, Samantha Morton and John Malkovich, which was due to start shooting next week.

It is claimed that the new tax move has removed at a stroke 30 per cent of the funding assumed to be available. But Paymaster General Dawn Primarolo said it was necessary to stop abuse. "These schemes are intended for people who risk their own money in running genuine businesses," she said.