A tax break already exists, but this would increase and equalise it. Previously, the 25% rate exists only for eligible productions which cost up to £20 million. For anything costing more than that, it's 20%. Now though, all eligible films will receive the slightly higher rate. This means, for example, a film costing £40 million will receive an extra £1 million in production budget.
What is meant by eligible films?
The Government's film arm, the BFI, will be held responsible for implementing this rule. For a film to be eligible for a tax relief, it must pass certain criteria in order to test its Britishness among other things.
The new tax relief was announced in the March Budget as a part of the new Government's attempts to bring more growth to the British Film Industry following recent monumental success. Two UK-US co-productions of recent years who have had huge success are riding the wave of making this all go forward – Harry Potter and the Deathly Hallows pt. II, a British film which grossed over £1 billion and Gravity which had slightly less financial success but humungous critical success as 2014's biggest Oscar winner with seven wins and they both benefitted from the 20% scheme as it stood.
Why is it important?
With this extra money, the productions inject even more money back into the economy certainly if they make as much money as the above films have. It's because the money goes towards creating bigger films which require extra crew and thereby creating more jobs. George Osborne explained quite rightly that it's jobs all across production, not just to actors or directors. It goes to costume and set designers and the rest of the people behind the scenes.
Since the scheme was originally started, it has contributed almost £8 billion to productions.
Does the investment even make a return?
Short story, yes. A lot. Amanda Nevill, chief executive of the BFI, who I was lucky enough to see get her Honorary Doctorate from the University of York in the same ceremony in which I graduated, sent a letter to The Guardian last year driving home just how much the former tax relief made for the country. Broadly, the gist of it is that "Every £1 invested in the tax relief generates £12 for UK GDP."
As the country's income based on the returns from its film production increases, it widens an avenue of money which we direly need at this time. You can't complain after asking for more investment in the arts,
On the other hand?
In 2013, Edgar Wright, director of the infamous Cornetto trilogy including Shaun of the Dead and more recently writing Marvel's Ant-Man, stipulated that the tax break, as it was, would make all the jobs for British film practitioners go to the big Hollywood productions who want to shoot here attracted by the tax relief. This would leave less to other smaller productions. As one of those practitioners, though, it's very easy to say that there will be far more than enough of us with more than enough experience to fill the industry with the new production blood.
He was more than right to be sceptical about the possibility of Ant-Man being able to be filmed in the UK because of all the studio space being used up by other projects. However, the better the state of the filmmaking economy in the country, the greater space there will soon be. It's a matter of large but slow growth. A growth which will be come visible soon. Osborne has done something right.
The whole thing should excite us all. It gives the UK new arenas for their resilient media practitioners to finally get their breaks and catapult the country to compete with the rest of the filmmaking world. The importance of filmmaking will be greater than ever.