Heroic knights, evil kings and fair maidens
The show is a musical adventure which sees a heroic knight battling an evil King Richard for the hand of his true love. The pilot has already been filmed in Bristol with full production to follow.
Aside from the fantastic locations available in Bristol and the surrounding area, and the expertise of the team at the Bottle Yard, it is thought this is a triumph of the new creative industry tax reliefs that are being rolled out.
High-end television tax relief
High-end television tax relief is what is relevant to Galavant. Qualifying companies can claim an enhanced tax deduction or in some circumstances a payable tax credit when calculating their profits. With the significant budgets involved in creating high end television drama this can be worth big money.
As with all the creative industry reliefs there are a number of criteria that must be met that include passing a cultural test, being intended for broadcast, and being categorised as a drama, comedy or documentary…among other things.
Opening the floodgates
Galavant is the first UK pilot produced by an American company since the tax relief was introduced, but it is unlikely to be the last. International faith in UK expertise is demonstrated by show of the moment Game of Thrones being filmed in Belfast, whilst the latest season of 24 has been set in London.
A helping hand for smaller British productions
And it is not just big international productions at which the tax credit is aimed. Smaller, local productions are just as entitled to it and, given that they originate in Britain, should be able to meet the criteria more easily. Specialist tax advice should help them gain maximum benefit from the available reliefs. The claims need to be carefully crafted to ensure all relevant expenditure is included.
A victim of its own success?
One potential headache for smaller production houses is that the tax credits could be so successful in encouraging large-scale overseas investment, that the UK skills-base becomes spread too thin. Put simply the big productions employ all the technicians leaving none left to work on British boutique productions.
If this can be remedied with training and new British jobs then this a valuable opportunity, and a perfect example of the virtuous circle that tax credits create.
Deep impact – a case study of the effect of tax credits on the most expensive film of all time
Disney again. And according to Forbes, the fourth Pirates of the Caribbean Film – On Stranger Tides was the most expensive movie production of all time. It weighed in at $410.6 million. Don’t worry though. It is reported that it grossed over £1 billion worldwide so they turned some profit!
Thanks in part to the British film tax credit this behemoth was filmed at Pinewood Studios and the Royal Naval College at Greenwich. At its peak it employed 895 production staff paying them a total of £10.4 million.
It was awarded a final British Film Certificate and has received £18.8 million from the UK tax authorities.
The British Film Institute reports that overall this tax relief costs the UK Treasury £150 million per year but that every £1 spent contributes £12 to GDP. So it appears to be a wise investment.
Jobs, infrastructure investment in studios, prestige – good news all round!
What next for the creative industries and tax relief?
In the first half of the year the video games industry won a protracted battle with the European Commission to gain State Aid approval for UK video games tax relief. TIGA (The Independent Game Developer Association) report this will create and protect 10,300 jobs and £450 million of investment. It is extra timely as reliefs in Australia, Canada and some Nordic countries are being scaled back leaving an international gap the UK can fill.
And fresh from this victory TIGA has teamed up with BIMA (The British Interactive Media Association) to champion the introduction of another tax relief scheme targeted at SMEs in the creative sector.
The scheme would be modelled on the way in which R&D tax credits work, but would reward training. This could help developers and other creatives to fund management training, strategic skill development and CPD. This in turn should increase productivity in the already valuable sector, and help forge better links with educational establishments leading to a pipeline of talent. This is just a proposal but we shall watch any development with interest.
Looking in another direction, relief aimed specifically at theatres has just come into force.
But the sector that was missing out and clamouring most for inclusion was Children’s TV, the sector was given a leg up in the Autumn Statement, with new access to a deduction worth as much as 25% of qualifying expenditure.
The big picture
Back in the summer the Prime Minister hosted a creative industry soiree. It was stressed that this was not ‘Cool Britannia 2’ – a reference to Tony Blair’s infamous hobnobbing back in 1997 – but was meant as a thank you to the 1.7 million people in the UK Creative industry who contribute £71 billion to the economy.
That’s some contribution, but the government wants more. It has a strategy to double creative industry exports to £31 billion.
Are you producing TV, film, animation, video games or theatre in the UK?
As you can see, tax relief could play an important part in your production. Speak to an expert from ForrestBrown to determine if you could benefit.