U.K. copros to spike with advent of country’s new TV tax break?

John McVay (pictured), the CEO of the U.K's Producers Alliance for Cinema and Television, explains to Playback how the new 25% tax relief on high-end productions may impact international co-productions.
John McVay

Coproducing with partners in the U.K. television sector may have become a lot more attractive after the British government unveiled a commitment to provide tax credit relief of up to 25% of qualifying expenditures on high-end TV projects and video games.

“The government will ensure that the reliefs are among the most generous in the world,” the Chancellor of the Exchequer (equivalent to the finance minister) George Osborne said as he handed down a fall fiscal statement or mini-budget Thursday.

The government also committed to launch a new “creative industry”-focused training program. It has earmarked six million pounds (about $9.5 million) to the initiative, which would run at least two years.

The news of the credit and the training scheme was warmly welcomed by the U.K. TV industry, who had been pushing for the credit for months.

John McVay, the CEO of the U.K’s Producers Alliance for Cinema and Television, explained to Playback the new tax credit was initiated to stem the loss of “runaway productions” out of the U.K.

It would be specifically focused on productions with budgets of at least one million pounds (roughly $1.6 million) per broadcast hour, namely dramatic and animated programs, as well as video games.

While he wouldn’t go so far as to say it would be a direct boon for treaty coproductions with countries such as Canada, citing the complicated nature of international co-productions, he explained they wouldn’t be hurt either.

Nevertheless, the credits will likely lead to a boom for U.K. TV program makers.

More details will be known Dec. 11, when legislation to change the country’s tax code would be tabled in parliament. The plan is for the legislation to kick in starting the beginning of April 2013.

McVay noted that in order for a project to qualify for the relief it would have to pass a U.K. cultural test, a requirement that stems from European Union regulations. But first the U.K. government must design that test, and get it approved by the EU.

While to an outsider it may appear as though the relief promise could yet fall through, McVay said there were few impediments in the way, as the development of the cultural test was a formality. “All the bits are falling into place,” he said.