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Press Releases
UK tax credit as producers' equity in feature films
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This is a joint press release issued on behalf of 91Èȱ¬ Films, Film4 and the UK Film Council
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91Èȱ¬ Films, Film4 and the UK Film Council join forces to give independent
producers a financial stake in their films
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91Èȱ¬ Films, Film4 and the UK Film Council, the
three principal public funders of feature films in the UK, together with
Pact, have today (14 May 2007) confirmed that an agreement has been reached on giving
producers an equity stake in the feature films in which they invest.
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Over the past few months, 91Èȱ¬ Films, Film4, the UK Film Council and Pact
have developed and agreed a position which emphasises and promotes the
principle that the benefits of the new UK tax credit should accrue to UK
film production companies in order to help achieve the Government's
policy objective of creating sustainability in the UK film production
sector.
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91Èȱ¬ Films, Film4 and the UK Film Council are unanimously resolved to
empower the UK independent film production sector to share in the
ownership and value of the films it creates whenever an investment is
made in a film.
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They believe this new approach will help create, for the
first time, a real ability for UK production companies to hold a
significant interest in their own films and, as a consequence, be able to
attract commercial investment into their companies to the benefit of the
whole of the UK film industry.
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In practical terms, from today onwards, this means that 91Èȱ¬ Films, Film4
and the UK Film Council together with Pact have agreed to endorse the
principle that in every British film in which they participate, the net
value of the UK tax credit created by the 2006 Finance Act, should be
treated as the UK producer's equity share in the film, recouping and
participating, wherever possible, on a pro rata pari passu, £ for £ basis
with other equity funding.
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David Thompson, Head of 91Èȱ¬ Films, said: "I'm really delighted about this initiative. We really hope it's going to
do something positive to help build the sustainability of film production
in this country.
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"91Èȱ¬ Films is really reliant on the talent and competence
of British producers. We have a great, great community of producers and
for everyone's sake we really need them to flourish."
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Channel 4 Controller of Film and Drama, Tessa Ross, said:
"Support for the independent production sector runs right through Channel
4's DNA.
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"At Film4 we need our producing partners to be strong and we
hope that this initiative will boost the entire sector and allow
producers to move onto even bigger and better things (with us,
hopefully!). We couldn't be more pleased with this initiative."
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John Woodward, Chief Executive Officer, UK Film Council, said:
"This is a real step change for British independent producers. For the
first time, we will all start with the principle that the net value of
the tax break (around 10-18% of the negative cost of the picture) belongs
to the producer, not the film's financiers.
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"We still have to make our
numbers add up, but this is a big shift in attitude and approach from the
old sale and leaseback days where the tax subsidy was used solely to the
benefit of the financiers to reduce their investment.
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"For the UK Film
Council this announcement is part of an on-going attempt to get
sustainability into the UK production sector. The rationale is to ensure
that a stream of the recoupment flows to the producer. Hardly a radical
idea across the rest of Europe but it's definitely a first for the UK."
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Rebecca O'Brien, Acting Chair, Pact Film Policy Group, commented:
"This initiative is of great importance to independent film production
companies – it presents us with a unique opportunity to begin to build
viable businesses and to become effective partners in our industry.
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"With
the public funders standing side by side with the production sector, we
now hope to see properly capitalised companies begin to emerge.
We've seen the powerful effect that rights ownership has had within the
independent television sector.
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"By ensuring the new film tax credit
operates for the benefit of production companies, producer equity will
make an enormous contribution towards achieving the Chancellor's stated
ambition of sustainability in the production of British films."
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Shaun Woodward MP, Minister for Creative Industries, DCMS, said: "The new Government film tax credit is a further key step towards
creating a sustainable and successful UK film industry. The fact that the
main public funders of film in the UK have joined forces is a real boost
to independent producers."
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