Changes to U.K. tax laws have raised the stakes for the Irish Film Industry

Delivering his budget speech today, U.K. Chancellor of the Exchequer George Osborne announced that his government aims to expand tax credits to cover video games, animation and high-end TV program production. This move that will allow the U.K. to compete more effectively with countries such as Ireland and Canada benefited with have such benefits. It’s expected that a tax credit of 20% of expenditure incurred in the U.K. up to a maximum of 80% of the production budget(Ireland’s rate is 28%). The  proposals will be subject to EU Commission approval and a consultation process, but could be introduced by April 2013. Currently there are three  BBC series being produced in Ireland and one for ITV2. ‘Birdsong’, the BBC’s adaptation of Sebastian Faulks’ novel, was filmed in Hungary, as was ITV’s forthcoming series, ‘Titanic’, written by the Downton Abbey-creator Julian Fellowes.

What is surprising, is how long it has taken the UK  to amend its tax laws to include TV production. From an Irish perspective the loss of the BBC, ITV and SkyHd productions and others will have serious consequences , but a greater threat to the Irish industry could be the loss of companies big U.S. production houses like HBO who produced 4 series of the Tudors at Ardmore Studios. In his speech today George Osborne specifically mentioned he hope that the changes would also help attract companies such as Disney and HBO (currently make 85% of their productions abroad) to come to make more of their premium shows in the U.K.  Ardmore  Studios had been booked out for 5 years with ‘The Tudors’ and ‘Camelot‘  injecting multiples of tens of millions into the Irish economy with out these shows what would the Irish film scene have been like?

Speaking to the Hollywood Reporter following Osborne’s announcement, HBO Exec VP business and legal affairs, Glenn Whitehead said: “The U.K. is one of the best places in the world to film as it has highly skilled people and exactly the right infrastructure to make great television.  Today’s news on a new tax incentive has turned the U.K. from one of the most expensive options into a competitive and affordable location.  We would therefore love to bring more production to the U.K.”

All this comes at a very bad time particularly for Kevin Moriarty and Ardmore Studios as it struggles to keep the lights on after losing out on Morgan O’Sullivan’s €30 million series of  ‘The Vikings’, but it will also make it increasingly difficult for the new Ballyhenry Studios at Ashford to attract further premium shows to use its ultra-modern sound stages.

With the exception of Ballyhenry’s announcement, these are very uncertain time for the future of Irish film. As I have mentioned in a previous post, it is believed that the craft unions are seeking travel time to and from Ballyhenry from Irish producers, by proxy it will have priced out of the market from the outset. If you add in the fact that Screen Producer Ireland has been unable to make progress after 15 months of talks in getting greater flexibility on a new craft agreement, it is sending out a very negative image of Ireland abroad.

George Osborne’s announcement today has raised the stakes for the Irish Film Board and Screen Producers Ireland. It now an imperative that out-dated work practices are discarded and get a new agreement in place without delay.

Despite a time of great austerity in Ireland the Fine Gael/Labour government has held faith, that tax incentives for the Irish Film industry will generate create thousands of jobs over the coming years. It is probably a good time to re examine section 481 and make it more aligned with today’s digital creative economy. Minister Deenihan must take a more proactive approach to ensure that.

© Tom Dowling 2012 image by Tom Dowling

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Categories: Film and TV

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