Tax break for films unveiled

A new tax break for the film industry worth up to £4 million a movie was unveiled by the Treasury today.

Treasury Minister Dawn Primarolo said the "generous" package would ensure the continuing success of the British film industry.

The tax break replaces the controversial Section 48 relief, due to end next summer.

The new tax relief will cover 20 per cent of production costs, compared with the 15 per cent covered by Section 48. It will also cover films with a budget of up to £20 million, an increase of £5 million.

Unlike Section 48, the relief applies to all production expenditure, not just money spent in Britain.

Treasury is demanding the money is paid directly to filmmakers, rather than third party investors as under Section 48. Ministers claim the old system was being abused.

But some film industry experts fear that closing the loophole will starve British movies of crucial investment.

The tax break was welcomed by UK Film Council chief executive John Woodward.

"Film makes a major contribution to our economy and to our culture. It is extremely good news," he said.