Tax rule change hits films

Film industry leaders are to hold an emergency meeting with the Inland Revenue today over a surprise crackdown on tax relief that could jeopardise film production in the UK.

Movie-makers reacted angrily yesterday after the Inland Revenue posted a sudden change to tax relief rules on their website with immediate effect. It was claimed that films currently being shot in Britain could have to stop shooting within a week because of the unexpected changes.

The film magazine Screen estimated at least 17 film ventures in Britain could be affected. However, other sources suggested films already in production were unlikely to be affected but other films slated to go ahead this year could be hit.

The changes appear to remove 30 per cent of the funding available for new and current film productions, although the crackdown is not specific to film. Dawn Primarolo, the Paymaster General, said tax avoidance schemes, which exploit relief for trading losses through partnerships, were being used to undermine "the true purpose" of tax relief.

The announcement clearly surprised the Film Council, which champions films and production in the UK. John Woodward, its chief executive officer, said the move reinforced the need for specific tax reliefs for British film as part of an agreed policy for the industry.