UK Publishes Draft Legislation On High-End TV Tax Credit; New Law Expected April 1

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UK Publishes Draft Legislation On High-End TV Tax Credit; New Law Expected April 1
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UK Publishes Draft Legislation On High-End TV Tax Credit; New Law Expected April 1

Popular British shows like Downton Abbey and Sherlock are closer to getting new tax breaks for shooting at home. The Treasury today published draft legislation outlining a 25% tax credit for qualifying “high-end” TV productions, animated programs and video games. It has also expanded the scheme to cover TV documentaries and responded to certain industry concerns over terminology and eligibility. Largely based on the Film Tax Relief scheme which has provided about £800M in rebates to 825 movies since 2007, the new law will be based on meeting a British cultural test. Co-productions made under an internationally recognized treaty may also be eligible. The UK hopes the incentives will stem runaway production and entice players like Disney and HBO to make more of their premium shows in Britain.

The draft published today (read it here) says the animation rebate will be available to projects where animation makes up 51% or more (down from the originally proposed 75%) of total production cost. It also defines “high-end” productions as programs that cost £1M or more per “programme hour.” But, the term “programme hour” proved ornery and so the government has clarified its position that an “hour” is based on slot time as opposed to actual running time. The law will also exclude certain genres like advertising, discussion programs and news or quiz shows. The proposed law was first announced in March. Following a final period of review and subject to E.C. approval, it’s expected to take effect on April 1, 2013.

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