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UK Government hits film industry again

PaperclipMoney.jpgThe UK Government are getting greedy again. They are restricting budget rules on how individuals offset losses against tax in limited liability partnerships. Now I know that'll turn a lot of you off, but generally speaking they are clamping down on the ability of people to avoid paying tax in their companies.

Well, an indirect result of this is that the film companies are going to suffer along with every other company, and with the film industry in the UK seeing a tiny rise in production, adding something like this now could turn the tide.

According to The Hollywood Reporter the Government are saying that this law needs to be tightened up and is not aimed at the Film Industry.

A U.K. Film Council spokesperson said Friday that the government's move simply reflects a desire to stop investors from avoiding tax rather than to prevent people from making movies...

With such complex structures involved in film financing in the U.K., some observers say the changes could mean that the sudden and immediate introduction of the new limits might leave productions that are about to lens with a giant hole in their budget...

...A spokesman for the U.K. Film Council said that the Inland Revenue move might have as big an impact as the sudden clampdown on tax funds in early 2004, which saw financiers and producers attending the Berlin Film Festival reel from the effects.

Typical that they are making changes and not thinking of all of the implications, or giving with one change and taking with another. Typical. The UK Film Industry is only just starting to pick up, and the concern is that this stops it from continuing to grow.





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Comments

It's hardly 'greedy' to make sure that people pay the tax that's due - particularly so when very rich people are concerned. And this is income tax, not corporation tax. (I pay my income tax - so why shouldn't a premiereship footballer or city fat cat?)

And I also think it's unfair to suggest that the Government have acted in this instance without thinking through the implications. That's certainly the case if you're suggesting that film partnerships should be exempted from this crackdown in some way - to do so would almost certainly be contrary to EU law on state aid, however much the Govt thought through the implications.

Well I'll soon be due £400 VED for my car, and it does less than 3,000 miles a year. By your thinking that's me paying what's due, by mine it's greed to line the pockets of the Government, especially as they are also reducing the amount spent on maintaining the roads.

You see just because something is a tax does not make it right or fair.

The hard fact is that it is cheaper for films, including full UK productions, to go to other countries and film making the shots look like they are in the UK after all.

That means the industry is going out of the UK and can't raise any tax at all. How is that helping anyone?

Productions have to be encouraged to film in the UK, the more that do the more we see money, experience, jobs and the overall industry increase.

If there is a risk of films going out of the UK, then the GAAP schemes do nothing to prevent them - in some cases they do the exact reverse.

What GAAP schemes do is to use accounting rules to create artificial losses (ie: losses which only exist on paper) which investors then use to write off their income from other sources. And it doesn’t make the slightest difference which films those accounting rules are applied to – they certainly don’t have to be British.

If you don’t believe me, just look at your earlier article - one of the films mentioned as having been funded by GAAP was Night at the Museum. This is an entirely American film, filmed in the US with entirely US talent (except Ricky Gervais). What justification can there be for diverting UK tax revenue to help find a US film? How does that benefit the UK film industry?

I entirely agree that producers should be encouraged to film in the UK – which is precisely why the new film tax relief is based on expenditure in the UK. Unlike GAAP schemes.

If you think about it, the bigger the film production budget, the greater the accounting losses which can be created. And, because the majority of really big budget films are filmed outside the UK, there would have been a massive exodus of UK investment into the US films, thereby killing any chances of genuine investment in British films. And this is precisely why the Government closed down GAAP schemes, because otherwise - quite apart from the avoidance of tax - there would have been real damage to the UK film industry.


You know it all sounds good and the comments make sense, yet the hard facts speak for themselves. Films are not being made here, and one's that are trying to be struggle or can't get the funding.

The point I've been trying to make is that any difficulties in raising funding for films is not a consequence of tax changes - that is not supported by the facts. Nor is it right to say that it was 'typical' of the Government to act without considering the consequences, when the reverse is more likely to be the case.

And I'm not sure it's right to say 'Films are not being made here'. The most recent figures we have indicate that more and more films are being made here - in fact 2006 had the second highest uk-based filming ever. And as the UK Film council acknowledge, this was due in no small part to the new tax incentives which the Government have provided:

http://www.ukfilmcouncil.org.uk/information/news/?
p=D4A1577802cf314DA4qHh1E4DA1A&skip=10

Of course, it might be that some producer was, in addition to claiming the fil tax credit, also using a tax avoidance scheme to make up a funding shortfall. But if that's the case, then they only have themselves to blame.

Well on the UK Film Council and your comments I don't believe that the reasons British Films are not being made in Britain is nothing to do with Tax. I'd need more convincing of that and it would have to be from the people who are trying to make the films themselves.

Sure 2006 was a great year, they had all the funding available to them.

It's also perfectly right to say that it was typical of the Governent acted without considering the consequences. We see it happening weekly in all aspects of UK Government.

You've overlooked the point I made previously, the way GAAP schemes work means that they do not necessarily provide any incentive to make films in the UK - which is why UK GAAP was used to fund a entirely US film such as Night at the Museum. And, because US films create the biggest opportunity for GAAP losses, that's where UK investment will go. Surely, you can't see that as a desirable outcome?

Or, if you still disagree with me and the film council, why do you think that tax is the reason for the apparent lack of filming activity in the UK (other than a couple of reports in the trade press, that is)?

Well you can take it personally and say I'm disagreeing with you, but the subtle difference is I have believed the many reports in such news sources as The Guardian and I have yet to be swayed away from that.

To say that other countries, such as the US, have better tax incentives to intice filmmakers over there instead of in the UK is exactly my point.

And I don't believe reports in the media when there are facts which demonstrate they are inaccurate. And even the Guardian used the example of Night at the Museum - difficult to see how that is an example of UK tax being used to make films here.

Plus of course, none of he reports on the GAAP schemes mention that film makers alreasdy have their own tax incentive, worth 20% of the budget.

You say that the US and others have beter tax incentives than the UK. I'm not aware of anywhere in the US which offer anything better than 20%: there's a 12% tax incentive in California, 10% in New York, 10% (payroll costs only) in Lousiana. Nor of anything more geneous than the UK's relief in Europe or Australasia. Which incentives did you have in mind?

I was quoting you John:

"because US films create the biggest opportunity for GAAP losses, that's where UK investment will go"

However I'm happy to point to all the examples in Europe. I'll rework the point for you:

"...other countries...have better tax incentives to entice filmmakers over..."

...and so they do.

You misunderstand my point.

I was saying that of the Government hadn't stopped GAAP schemes, then any UK investment is likely to be used where production budgets are highest, ie: Hollywood.

But they are not a film tax incentive - they're an avoidance mechanism for rich individuals. And they are certainly not a film incentive provided by the US - not least because the US doesn't use GAAP which is the accounting standard used in the UK.

In other words, the effect of GAAP schemes in the UK will be to drive production out of the UK - unlike the 20% which is based on UK filming. And I assume you don't see any benefit to the UK film industry of UK tax revenues being used to fund A Night at the Museuem?

I would be grateful if you could point me to a film tax incetive in another country more generous than the one in the UK.

Hey John, I have no idea about the Tax laws of other countries, after all this is a film site and not a tax site, my knowledge lies in the cinema, but then you already know that.

I don't know why you keep coming back and fixating on Night at the Museum, I've never mentioned this at all. I certainly did mention Robert Burns as an example of one of the many UK films that just can't get made because there isn't any funding available for it.

You keep arguing tax points and showing your negativity towards "richer" people supposedly tax avoiding, I keep talking about UK films not getting made becase there isn't any funding for them and the amount of UK films that go outside of the UK to film because it's easier on the limited funds available.

It just seems that we're going to go round in circles here, you arguing tax laws and me arguing films lacking funds and leaving the UK.

Sorry - when you said that 'I'm happy to point to all the examples in Europe', I assumed you had more detailed information than I did.

I agree that it is very difficult to raise the finance for films - but you are saying more than that. You have asserted that the reason it's so difficult for films to raise funds is lack of Government support, and that's point where I take issue. Because it simply isn't borne out by the facts, depsite what an ill-inforned article in the Guardian might say.

I have in front of me the 9 March edition of Screen International, which has an editorial on the GAAP scheme incident. It says that this might have come as a blow to UK film mkers, but @The UK will recover, not least becuase it now has an attractive and stable tax credit.'

It goes on 'If we are talking about film asa potential profit maker, then we have an industry. But when the tax loophole is more important than the product, there is little room for growth.'

And my reference to Night at the Museum is to demonstrate that the schemes which the Government stopped - an action which you objected to - have the precise opposite effect to encouraging filming in the UK.

Richard, you mentioned the Robert Burns film, surely now that 300 has been successful and Gerard Butler will go on to star playing the title role, funding will be found somewhere taking into account the box-office success of Butler at the moment?

Yes John, I did say that, and again I refer to my previous comment that this is a film site and my knowledge lies in the cinema. I'm very happy to point to examples of films that have taken to other countries to film rather than the UK because of the costs.

If you are taking umbridge with the article that The Guardian wrote and you are claiming that they are inaccurate then surely you should be taking it up with them? I am quoting a very reliable source and commenting on their story.

During the discussion I have made my views very clear, and again they are that films are not being made in the UK because they cost too much and so filmmakers are going to other countries.

Referring to The Guardian article, a story that was also written about in many other papers and internet sites, I have believed this to be due to the UK Government Tax Laws. Laws which have caused problems and been reported about many times in the past, from a Government that I believe repeatedly makes bad judgements and introduces laws and guidelines which have an adverse affect on the UK.

You seem to be laying the blame of films being shot outside the UK at the feet of these schemes, and yet UK films have been struggling for a very, very long time.


Simone - I wouldn't bet on it. As I said the film is struggling to find the financing, like so many other films in the UK and just like they have done for a very long time. I don't see that changing anytime soon.

I think the one point I'm trying to get across is that you shouldn't always believe what you read in the papers. And it's pointless taking the matter up with the Guardian - they're in the business of selling papers, not printing accurate stories.

I appreciate that this is a film site. Obviously. But when you make statements such as the Government is being greedy and attacking film makers when in fact the UK has an incentive for films which is more geneous than anywhere else in the world (something which you were unaware of before I pointed it out) then it's entirely appropriate to respond in the way I have.

What the Government have done in this case is to put an end to a dodgy tax scam which can be used in such a way that it encourages UK investors to put their money in US films. This surely is something you would support if you want to see more film production in the UK. In what way can this action be described as an instance of Government making 'bad judgements and introduces laws and guidelines which have an adverse affect on the UK'?

Of course it is difficult to raise funding for films - but this is nothing to do with action on the part of the Goverment. It's just a fact of life in film making.

Well you have to appreciate that I will believe, and use as a source, a national well respected newspaper. I've no reason not to believe the Guardian, particularly when my experience of them has been a paper of surprisingly strong editorial content and accuracy.

"UK has an incentive for films which is more geneous than anywhere else in the world (something which you were unaware of before I pointed it out)" I don't believe that's true, and I'll address that in my final point.

"it's entirely appropriate to respond in the way I have" - John, that's fine. This site is for discussion and debate, and I enjoy it! Don't think that I'm sitting here angry or frustrated at the keyboard. I believe everyone should have their opinion and say too, have you seen the anti-300 thread!

"What the Government have done in this case is to put an end to a dodgy tax scam" - I totally appreciate that viewpoint, and that's a good thing to have done. I still think it is having an adverse affect on the industry because in various sources I trust I've read to that effect.

"Of course it is difficult to raise funding for films - but this is nothing to do with action on the part of the Goverment. It's just a fact of life in film making." - Going back to the previous point as well, it is difficult to raise funds to get films made for everyone, everywhere. Yet UK films are still turning to countries outside the UK to produce and film their movies, that's the point I keep making.

I don't know why you're reluctant to believe that the UK film tax incentive is more generous than any other - not least because it happens to be true. Unless you have information of which I'm unaware?

Likewise, I don't see why you choose to take what the Gaurdian says as gospel truth. You are of course at liberty to trust whatever sources you choose, but where those sources give a partial and innacurate view, it looks slightly illogical.

I realise that the point you are making is that films are looking overseas to get made because of the costsof doing so in the UK. But you've haven't explained why you consider this to be a consequence of action on the part of the Government.

Or to put it another way, what would like the Government to do to encourage film production in the UK which they are not doing already?

The only place I've read to the contrary of the Guardian, The Hollywood Reporter and the UK Film Council, are your comments. You'll appreciate that I believe these more.

"where those sources give a partial and innacurate view" - well that's your belief from your viewpoint. You would have me believe that you know the undeniable truth above all, whereas I think that your viewpoint isn't as clear cut and black and white as you make it out to be and that the UK Tax system is having a negative impact on UK filmmaking.

Personally, after writing for so long on the industry, I believe the issues to lie with the costs of production in the UK and the levels and types of incentives which are down to the Government. Incentives offered in Europe are far better and we see films moving there much more often.

We actually heard that Narnia's Prince Caspian was to film in New Zealand because it was cheaper than the UK, however I wrote a positive story on the Government taxes when they announced they would return when the tax system favoured them.

http://www.filmstalker.co.uk/archives/2006/12/narnias_prince_caspian_to_film.html

Other stories I've written on this site give me a similar poor view of the Government...

http://www.filmstalker.co.uk/archives/2007/03/st_trinians_and_brideshead_rev.html

http://www.filmstalker.co.uk/archives/2006/12/uk_implements_britishness_test.html

...and generally having lived here for my entire life I've seen how poorly thought through and executed the Government decisions can be.

Again, you say that 'Incentives offered in Europe are far better' than in the UK - which ones are you referring to here? France has a film tax relief, which is capped at at maximum of 1m Euros per film (the UK's relief has no cap). There are no incentves whatsoever in Greece and Portugal. And those that do (Germany, the Czech Republic, etc.) are less generous than their UK counterparts.

Not sure why you think the stories you link to 'give...a similar poor view of the Government'. The first story is about action against the GAAP schemes which I've mentioned before: if a film is already getting 20% of its budget paid by the taxpayer, what justification is there for grabbing more? (If anyone should be called greedy I think it's the film makers rather than the Government.)

And as for the culltural test, you might personally not like it, but that doesn't mean that it puts the Government in a bad light. It might help if you understood the reason why the test was introduced: it is a condition set by the European Commission for any country in Europe who wants to suport their national film industary. This is made clear in the Commission's press release when they approved the UK scheme.

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/1611&format=HTML&aged=0&language=EN&guiLanguage=en

Perhaps the difference is that you base your views on reading the papers, whereas I base mine on speaking to the Treasury, the Film council, film producers and those whose job it is to raise finance for films.

Once again, I am not a Tax specialist, I can say this because time and time again productions move outside the UK and the reasons they give for the production move are that the incentives offered by the other Governments are greater than those in the UK, and production in the UK would not be financially possible.

If you're going to attack everything I say then why not come back with some evidence to the contrary. UK films are turning outside the UK to get made because it is more financially viable and there are better incentives to do so.

Are you now saying that the film productions are lying? You've mentioned four countries out of Europe, there are a fair few others.

"you might personally not like it, but that doesn't mean that it puts the Government in a bad light" Yes it does, the very fact I said it means that they are put in a bad light, first and foremost with myself.

I base my views, as I said in previous comments as well, on various different sources including the film productions that continue to move away from the UK for better incentives and cheaper productions. Not only that but my ownership and running of companies and my own experiences of the Government decisions seen as a UK taxpayer - I believe I've said most of these before and keep repeating them.

As for the test my issue, which was clearly stated (although I missed the errors in the typing) was not so much with the whole concept of the test or who initiated it but with the questions and what it proved, or didn't prove.

I think the issue is that you won't let go of the Tax issues and look at the bigger picture and what is actually happening to film productions.

It surprises me that if you are someone who speaks to the Treasury, Film Council and Film Producers that you can't even speak to The Guardian to discuss the story which you claim is false.

Seems to me you are in a far better place to raise that argument with them than a lot of people who don't hold such a lofty position as yourself. It strikes me as odd that you would rather sit and argue with one person about it.

Sorry if you think I'm attacking you - that's not my intention. I'm simply trying to demonstrate that reading only the papers gives you a partial and inaccurate view of film financing.

And I've tried to give evidence to refute the idea that overseas incentives are more generous than in the UK, but you choose to ignore it. I'm happy to dig out the full list of every tax incentive in Europe if that will convince you that I know what I'm talking about.

And I'm not remotely interested in taking anything up with the Guardian, or indeed with any newspaper.

Or indeed with the BBC. Let's take an example - http://news.bbc.co.uk/1/hi/entertainment/4772667.stm
Here's the most prestigous news agency in the country and its main film spokesman saying that 'Britain did "next to nothing" compared to France'. This is absolutely false.

If the productions which move outside the UK because of insufficient incentives by the Government are largely big US films, then they are certainly not going to France - which explciltly give no incentive whatsoever for filming by US studios. Whereas in the UK, we have filming in the UK at the moment Fred Claus, Stardust, Mama Mia, Prince Caspian, The Golden Compass - and I could go on. Looks to me that the UK Government is doing that bad at encouraging film production here.

Perhaps you could cite examples of films which have moved out of the UK because of the greater incentives offered elsewhere?

Yet you're ignoring what I'm saying, the information I have found are from film productions, The Hollywood Reporter, Variety, UK Film Council, more than just the papers.

Once again though, you'll forgive me for believing these sources rather than you just making statements to the contrary. Someone who I have no idea of who they are.

It's interesting that one of the sources you gave earlier in the discussion is about the number of big budget UK films which were nominated for Oscars, and yet you are complaining about big budget films receiving too much money. The three films mentioned are the very top of the UK film market, and one wasn't shot in the UK.

Indeed the films you mention that are filming in the UK are again the top end of the film market. These are the biggest budget films that the UK could expect to see, the ones you were complaining about when talking about the previous tax loopholes you wanted closed.

It's interesting to think that these films would have all benefited from the tax loopholes you have mentioned and want closed, because the films have been in production for some time and these areas of legislation have just been closed.

It's also interesting that that the four production companies behind Golden Compass are all US companies. Stardust has two US and two UK. The Queen has one Italian, three French, two UK and one US. Last King of Scotland is the exception with six UK, one German and one German, and was almost entirely filmed in Uganda.

So are these great examples of UK films pulling in UK money into the UK market and UK productions?

The other link you provided is a European press release talking about how great one tax incentive is. One which gives back 25% of any TAX LOSS and only for films that qualify for that inadequate UK cultural test.

The evidence you've tried to give for European tax incentives is merely you saying that they're not good enough. How can you expect me to take your word for it over all the sources above, and when you won't even take a single word of what I say onboard?

Here's a great example, your paragraph on the BBC. You say of the BBC's main spokesman "This is absolutely false", and that's it. That's all you say, hardly evidence, and how do you expect your word to be taken over a lead spokesperson for the BBC?

What gets me is if you're not remotely interested in anything any newspaper or the BBC has to say then why are you repeatedly arguing here, with one person?

I’m sorry if you think I’m ignoring you – I’m simply trying to understand what you’re saying. And if I do understand your latest response, you don’t believe anything I’ve said so far – even though I have provided web links to support my statements where I can.

Let’s start again. The UK Government provide an incentive to film producers through the tax system. For films costing less than £20m, this incentive is worth 20% of the total budget: for those costing over £20m, it’s worth 16%. This means that a qualifying film which costs £10m to make gets a payment from the Government worth £2m. Or something like a Harry Potter film which costs something like £200m gets £32m from the Government.

This happens to be true – I’m not making it up. The Film Council believe it exists even if you don’t on the grounds that the Guardian neglected to mention that film makers are already getting a very good deal.

http://www.ukfilmcouncil.org.uk/information/news/?p=D4A157781d6b9286FFrMk3935491&skip=100

It's interesting to think that these films would have all benefited from the tax loopholes you have mentioned and want closed, because the films have been in production for some time and these areas of legislation have just been closed.

This is a slightly bizarre point. Each of the films I mentioned would qualify for the generous levels of subsidy from the UK Government, so what justification is there for taking a further slice? Unless you’re seriously suggesting that tax avoidance is OK provided that film companies are getting the benefit.

Plus you’re making the assumption that all of the films I referred to were being financed in part by the partnership avoidance schemes which have now been outlawed. I don’t think that is the case, and I doubt whether your information is better.


It's also interesting that that the four production companies behind Golden Compass are all US companies. Stardust has two US and two UK. The Queen has one Italian, three French, two UK and one US. Last King of Scotland is the exception with six UK, one German and one German, and was almost entirely filmed in Uganda.

So are these great examples of UK films pulling in UK money into the UK market and UK productions?

Not sure what point you’re making here. Are you suggesting that these are not British films in some way?

I never mentioned Last King of Scotland as far as I remember, although since you have I'm glad to do so. This didn't qualify for the tax relief which, as I've said, exists to encourage film production within the UK, but qualified under its predecessor which, as I've also said before, gave relief on expenditure wherever it was incurred. (In the same way as did The Constant Gardener which was filmed in Kenya.) But again, I’m unclear what point you’re trying to make.

The other link you provided is a European press release talking about how great one tax incentive is. One which gives back 25% of any TAX LOSS and only for films that qualify for that inadequate UK cultural test.

Not sure what your objection is to the EU press release - this simply describes the mechanism whereby a film gets 20% of its budget paid for by the UK taxpayer. A ‘tax loss’ (or ‘accounting loss’) is in effect the value of a film’s budget spent in the UK.


The evidence you've tried to give for European tax incentives is merely you saying that they're not good enough. How can you expect me to take your word for it over all the sources above, and when you won't even take a single word of what I say onboard?

I have given, on more than one occasion, the value of tax incentives which exist in other countries. And here’s few more:

Australia and NZ: 12.5%

Canada: 15%

Czech Republic: 8%

France: 15%

Ireland: 12%

Hungary: 17%

Luxembourg: 15%

South Africa: 15%

On the other hand, what you have said, again on more than one occasion, is that overseas film incentives are more generous than they are in the UK. The difference being that you haven’t substantiated that statement with any evidence.

Here's a great example, your paragraph on the BBC. You say of the BBC's main spokesman "This is absolutely false", and that's it. That's all you say, hardly evidence, and how do you expect your word to be taken over a lead spokesperson for the BBC?

I thought the reason why would have been obvious. Ross said that there are Government incentives for films in France but not the UK. The truth is not only that there are incentives in UK but also that they are more generous than in France – 15% compared to 20%, as well as the French cap of 1m Euros which has no counterpart in the UK. Or perhaps you think I’m making that up too?

What gets me is if you're not remotely interested in anything any newspaper or the BBC has to say then why are you repeatedly arguing here, with one person?

On the contrary, I take a very keen interest indeed in what the BBC, the Guardian and the rest of the media say on the subject of film financing. But the crucial thing is that I have more up to date and detailed information which demonstrate the inaccuracy of what they’re saying. On the other hand, you seem to be determined to believe what’s said in the media, to the point of disregarding the information I’ve been providing.


And why am I taking this up with you rather than the Guardian? Well, it was you and you alone who made statements like 'the Government are being greedy again'.

But the crucial thing is that I have more up to date and detailed information which demonstrate the inaccuracy of what they’re saying. On the other hand, you seem to be determined to believe what’s said in the media, to the point of disregarding the information I’ve been providing.

But on whose authority does your detailed information come from JohnL, do you work for the government? From the way you've been dealing with this discussion you seem to have much clout on the subject matter, or if you can't reveal your sources you'd rather stress that Richard's opinion (to which he is entitled for) is wrong and yours was right?

I'm flattered to think I have any clout - I just know what I'm talking about. And far from revealing my sources of my information, I've provided links to everyone one of them (apart from the overseas film incentives which were published in Screen International). And that's my only authority.

Of course, Richard is wholly entitled to his opinion - but I have been trying to provide information (from creditable sources) of which he doesn't seem to be aware and looking to see his response.

On a more general point, do you think I'm making all this up about the Governemnt providing generous incentives to UK filmmakers? Well, I'm afraid it's true - here's another source: the levels of benefit are set out at paragraph 3.10 -
http://www.hmrc.gov.uk/films/draft-guidance/chapter-3.pdf

It's incredibly frustrating that you continually ignore what has been said before, particularly your own comments. I'll keep going though.

As I've already said regarding your statement that you've provided web links to support your statements, see my previous comments which talks about the two links that you provided.

The one regarding big budget films at the Oscars and the other saying that one of the UK tax schemes gives back 25% of any loss of tax for films that qualify for the UK cultural test.

The two links aren't great supporting arguments, so you should by now realise that I'm obviously going to believe the sources I mentioned in that same comment (film productions, The Hollywood Reporter, Variety, UK Film Council) over your statements with these two links.

After all if I could appear on your site and start saying "the moon is made of cheese and I am an expert and know more than all of you", but that doesn't make it true and it doesn't make anyone believe my argument.

As for you repeating the figures for this tax deal, well we've already covered that one and my response was about films going away from the UK market to other countries or not getting made at all, a hard fact of any film market but particularly the UK film market.

You are missing the point (yet again) about the comment I made. You mentioned these films to back up your argument of how well the UK film industry was doing without these tax loopholes you so hate, and my point was that because these films take so long to go through production (years with financing required throughout) they would have been made possible because of the very tax loopholes you said were so bad.

So using these films to back your argument of the UK film industry doing so well is a bit two faced since they will have been made through the tax loopholes you are so against.

On the subject of the Production companies behind the films I find it hard to believe that you don't understand what is happening here, don't you understand where the money comes from and goes to?

The Production companies are the ones putting money in, and they'll be the ones taking their money back with profits. So how UK are these films? Not very, there's a ton of US money behind them and US companies looking to take back their money and their profits. It's a complex business.

My apologies, you are right in saying that you did not mention Last King of Scotland, that was my mistake and for once the evidence is right there in black and white. Well done.

I have no objection to the press release, I have an objection to you stating that you have all the knowledge and are undeniably right and have provided all the evidence we should need when you only gave two sources. Both sources only gave limited and brief information, which I pointed out, and neither convinced me over the original source stories.

Before this comment you mentioned a few countries in Europe and their incentives, and not all with actual figures. That's hardly exhaustive so being superiour once again and stating that your word should be taken as gospel is quite arrogant and poorly conceived.

Now you've listed five European countries with a percentage against them. Since myself, and the readers, are not tax specialists these just look like percentages against country names. We don't understand if these are complete incentives from the country, how they are derived, if there are more incentives offered, if these are on the full amount, the tax loss, a percentage of these, etc.

Still hardly conclusive and exhaustive.

Yes I haven't come back with evidence on that because I don't feel the need to or have had the time to do it. Off hand I know that Dog Soldiers filmed entirely in Europe because it was too expensive to film in Scotland apart from the few helicopter shots of the hills.

You'll understand that I have a full time job as well as the running of this site, and a host of readers who want to hear about film information, so you'll forgive me for taking some time. This weekend I'll sit down and search out more films that have done exactly this.

Once again on the BBC comments you just don't get it. You've arrived here and just started saying "I am right and the BBC/Guardian/UK Film Council/Variety are wrong". To me and any other readers you are just another commenter. So saying "they are wrong and you are right" while saying some figures won't mean anything to anyone. Like I say, it's just like me arriving on your site and saying the Moon is made of cheese and it's true because samples show it.

Once again you're off making these statements "I have more up to date and detailed information" when referring to the BBC, the Guardian, you even say "rest of the media". So you're now saying that you know more than all the media? Wow. You must be the Chancellor, but then you're just an arguing commenter on a film site that despite all this knowledge and power won't go and correct these media sites.

Yes, I said "the Government are being greedy again", they always are. I've lived here all my life and I know they are greedy, I have first hand experience of it and gave an example way before.

In the matter of films I still believe they are, and I still believe these media sources over a commenter dropping statements that "I know better because I do".

On your comments to Simone's, once again you've provided two sources that don't back up that much, as I've discussed twice now. I have yet to look at this latest gov link you've provided, but I will.

As a point of clarification, when you say that the links I’ve provided ‘aren’t conclusive’, do you mean that you genuinely don’t believe that the Government provides an incentive to film makers which is worth 20% of the production budget of the film?

If you will accept what the Film Council say, perhaps you might be interested in the link I provided earlier, which not only sets out how much the incentive is worth, but also a statement from the CEO that the Government’s announcement of the relief is ‘the best news the British film industry has received for five years’ and ‘marks a new era for the future growth of our industry which operates in a highly competitive global marketplace’.

So the UK tax incentive for films is an objective fact, not a controversial argument I’m trying to convince you of. It simply makes no sense to me if you simply refuse to accept that such a relief really does exist. If you refuse to recognise the existence of things which are self-evidently in place, then we’ll go round in circles for ever.

And I think I have provided a reputable (and conclusive) link to support everything I’ve said. The one exception is the table comparing international film tax incentives which I took from Screen International, the only reason being that it isn’t available on the web. (And the figures indicate the value of the subsidy as a percentage of the total film budget where the film was produced in the respective country.) So to suggest my comments have no more validity than a statement that the moon is made of cheese is totally unreasonable.

You are missing the point (yet again) about the comment I made. You mentioned these films to back up your argument of how well the UK film industry was doing without these tax loopholes you so hate, and my point was that because these films take so long to go through production (years with financing required throughout) they would have been made possible because of the very tax loopholes you said were so bad.

I thought I’d addressed this point previously, but glad to do so again. The ‘tax loopholes’ which you refer to (and which the Government closed down last month) were created to allow people to avoid paying income tax: they were not film schemes. Because of the way the schemes were structured, they needed actual businesses with an expenditure pattern which could generate an accounting loss for tax purposes, some of which were film companies. But it doesn’t follow that all film companies were involved or felt an impact as a consequence of the Government’s action.

In other words, it would be wrong to assume that all, or indeed any, the films I mentioned (Stardust, etc.) were financed in part by GAAP scheme. (If I were to speculate, I’d say they wouldn’t have been relying on UK partnership investment, because a multi-million pound film is a very risky undertaking, even for an established US studio, and they wouldn’t want to increase that risk unnecessarily by a dodgy tax scam.)

Plus the other important point is that all of those films would have qualified for a genuine UK film tax relief (the predecessor of the current 20% relief) which is the real and stable source of Government incentive for film making.

The Production companies are the ones putting money in, and they'll be the ones taking their money back with profits. So how UK are these films? Not very, there's a ton of US money behind them and US companies looking to take back their money and their profits. It's a complex business.

This is a very interesting point and one where I have some sympathy. And it’s true that the film incentive is directed towards the production of British films, irrespective of the nationality of the ultimate film company or studio (although the production company itself needs to be within the charge to UK corporation tax, of course). But if you made the incentive conditional on the profits from the film being kept within the UK, then the consequence would be that the US studios would be reluctant to make films in the UK. In other words, you would cut off one of the main sources of inward investment in the British film industry.

(That said, the tax incentive is worth more if it’s used to off set profits from a film rather than being claimed as a straightforward cash payment, but I don’t want to get into any more technical detail. As you said, this is not a site for tax specialists.)

And, finally, to put my comments about the Guardian (and other media) account of the reaction by part of the film industry to Government action to counter sideways loss relief schemes – these accounts entirely disregard the fact that films were already getting a very generous tax subsidy from the Government before taking additional finance from such schemes. By failing to mention such an important fact, these accounts gave an incomplete picture and were therefore misleading. Again, I hope you can accept this analysis.

I hope you think that I haven’t ignored the points you’ve made, but glad to address any I might have missed inadvertently.

You haven't responded to my last message after 4 days. Whilst I fully understand that you have other demands on your time, I'm still intrigued by your lack of response.

I can think of two possible explantions:

- that you have concluded that I might be right in pointing out that the Government gives very generous subsidies to film production through the tax system, but have decided not to acknowledge it; or

- that you still resist the idea on the grounds that you believe the Government is only worthy of your approbation ('greedy', etc.) and that any facts which are at odds with this belief should be ignored.

The sole reason for responding to your article in the first place was to provide additional information which I believed you might find useful and/or informative. So it's a little odd that you have chosen to ignore what I've written, even when I've tried to address the specific pionts that you have raised.

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