In today's global production environment, many international film production centres are introducing or enhancing their film tax incentive offers in order to remain competitive. Without a rebate, production centres find themselves at a disadvantage when looking to attract inward investment or retain domestic production.
In today's global production environment, many European and other international film production centres are introducing or enhancing their film tax incentive offers in order to remain competitive. Without a rebate, production centres find themselves at a disadvantage when looking to attract inward investment or retain domestic production.
According to the 2015 Olsberg SPI's report Economic Contribution of the UK's Screen Sectors, the UK's film tax relief is vital to sustaining current levels of global competitiveness and employment. 'For each pound of Film Tax Relief (FTR) granted across the period 2006-07 to 2013-14, £12.49 in additional GVA was created through direct and multiplier effects. This equates to a taxation return for the Exchequer of £3.74 in additional tax revenues for each pound of relief granted.'
The UK has generous Tax Relief for film and high-end television. For details go to: [article link]
It is important to budget UK fringes into a UK production budget. These include Auto Enrolment pensions. Her Majesty's Government's legislated changes to UK pensions ensures that all employees will receive the employer pension contributions they are entitled to. Auto Enrolment links directly to Sargent-Disc's payroll service, ensuring seamless integration and automating many of the time consuming processes for the employer.
For producers and accountants, analysing and keeping up to date with tax rebates in different jurisdictions and building the variables into a budget can be complicated. An extremely valuable resource for assisting in understanding the differences and similarities between the incentives is Entertainment Partners' website. Their production incentives information is detailed by individual jurisdiction, and allows for incentives to be compared against each other.
The first step in ensuring the expected value of the tax relief in any jurisdiction is correct is to create an accurate schedule and budget by an experienced producer or production accountant. Given the schedule and the budget together are the documents which create the finance plan, they are essential for producers when raising the money to finance the production.
An example of the need for accuracy within the budget is around whether a production incentive could apply to particular labour costs. The labour must be correctly identified as resident or distant, the numbers of crew in each category must be known, and the number of weeks or days they are needed for. These essential elements will help to create an accurate figure of how much will attract an incentive (which in itself will be different in different territories).
For low budget and very low budget British qualifying films, different arrangements for performers may be used, all of which are outlined in the PACT/Equity cinema agreement. The budget will need to be certified by a member of the Production Guild of Great Britain.
Industry standard software is available to help when putting together a budget. Movie Magic Budgeting 7 , for example, has been designed to assist with complex budgeting scenarios. It allows for elements to be pulled through from Movie Magic Scheduling, helping to save time and ensure accuracy. It also allows for multiple incentives, credits, and rebates to be applied, compared, and analysed.Here is a video to show you how:
There are two below the line departments in the UK film industry
that have negotiated agreements outlining rates of pay. These are
the PACT/BECTU major US studio feature film construction agreement
and the PACT/BECTU major studio feature electricians agreement.
Sargent-Disc has analysed the average industry pay scales for a
range of departments and grades in the UK industry to help when
budgeting for production.
The pay scales are currently available to Sargent Disc payroll customers through the online payroll portal SD Online 2.0.
The rules surrounding qualifying a film as British and the UK
tax relief has been detailed in our insight article UK Film Tax Relief.
In addition to the tax relief, there is a production fund administered by the British Film Institute that British qualifying films may apply to, and regional money administered by:
Sargent-Disc can provide a range of services to a production, from pre-production through to post. This includes our suite of digital production tools including, SD Online Payroll, Digital Purchase Order, SD Production Card, Movie Magic Scheduling and Budgeting, and Vista Accounting Software. For information about our services, please contact us at Sargent-Disc. Let us help you with your production and employment enquiries about working in the UK, and take the drama out of your production. Our services include:
For advice, guidance and facts about international production incentives, and to compare them online, visit the incentive solutions section of the Entertainment Partners website or contact them directly here:
Incentives Solutions Group
Joseph Chianese, Senior Vice President
There are also a number of specialist accountancy and audit
firms in the UK that advise clients when structuring British
qualifying films. Here are just a few:
Grant Thornton UK LLP
Christine Corner, Partner
Tel: +44 (0)20 7728 3171
John Graydon, Partner
Tel: +44 (0)20 7841 4281
Steve Joberns, Principal
Tel: +44 (0)20 7312 6558
 Los Angeles Times, September 13 2011 http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/09/on-location-sacramento-delivers-a-mixed-bag-for-hollywood-film-tax-credits.html