News – Loophole closed

The Inland Revenue has caused outrage among film producers by closing a tax loophole without consultation with the industry. New rules will mean that investors who have established partnerships to capitalise British films will no longer benefit from tax breaks.
The tax avoidance schemes which support this type of investment were described by the Paymaster General, Dawn Primarolo, as “manipulating tax relief to create claims for losses in excess of the capital at risk.” The UK Film Council has proposed to the Inland Revenue that a transitional relief scheme should be established to support those films for which financing had already been established. It also emphasised the need for “film-specific tax relief.”