Government asks Film Council to spy on tax evaders

Tessa Jowell, the Secretary of State for Culture, Media and Sport, is to order the UK Film Council to report suspected dodgy dealings and tax scams in the film industry direct to the Government for action.

Producers will be warned that any attempt to find new tax loopholes will put them at risk of losing their investment because the Government will close them down, Ms Jowell told The Independent.

Two tax breaks were created specifically to boost film-making in Britain: Section 48, which was introduced in the 1997 Finance Act for budgets up to £15m, which covers most British films, and Section 42, which dates back to the 1992 Finance Act, for projects in excess of that figure.

They have cost the Government an estimated £2bn in the past seven years and were the only ones that were legitimate, she said. "The message is clear. There are two tax breaks so don't go trying to make any more. If you do, you risk losing all the money that investors have put up. I'm asking the Film Council to be my eyes and ears... and to alert me to any new scams. The excellent work of hundreds of smaller producers is being ruined by a few rogues."

There was uproar in February when the sudden closure of one tax loophole, involving investment partnerships, put a spate of films with stars such as Jude Law, Johnny Depp and Keira Knightley in jeopardy for a saving of £100m a year.

But many privately conceded their rapid growth had prompted cavalier investment by wealthy individuals who routinely pulled out of the projects before they could make profits so as to maximise their eligibility for relief.

Tessa Jowell said people knew the partnership deals were "a scam that was skating on the edge of what was permissible. I have no regrets about the way it was done. I hope the effect will be salutary."

The Government is also reviewing the terms of co-production deals with other countries to crack down on abuses whereby some producers allegedly inflate the budget spent in Britain to qualify when most of the work is really done overseas. Co-production treaties should not be "a way of using taxpayers' money to fund films that are essentially made in other countries," she said.

They were keen to advertise that the UK was one of the best environments in the world to make films in terms of tax and facilities.Section 48 runs out in summer 2005 and Gordon Brown announced in March that it would be renewed.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Smart phones, dumb reading: Rebecca and Harry from ‘Teens’
tv
News
people
News
Amazon's drones were unveiled last year.
business
Arts and Entertainment
Russell Tovey, Myanna Buring and Julian Rhind Tutt star in Banished
tvReview: The latest episode was a smidgen less depressing... but it’s hardly a bonza beach party
Life and Style
Worth shelling out for: Atlantic lobsters are especially meaty
food + drink
Sport
Gareth Bale
footballPaul Scholes on how Real Madrid's Welsh winger would be a perfect fit at Old Trafford if he leaves Spain
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss