"The Chancellor's announcement that he will introduce corporation tax reliefs for the production of British video games, television animation programmes and high end television productions is exciting news for the industry and capitalises on the current popularity of British programming.
"It's great that the lobbying from the likes of Tiga and Animation UK, which Grant Thornton has been supporting, have had such a positive impact. It's also encouraging to see the multinational US based broadcasters like Disney and HBO lending their weight to the campaigns.
"We expect that the changes, which are still subject to a consultation which opens this summer, will take the form of an extension to film tax credit, a model that is currently working extremely well. Under this model a £4million drama production will be entitled to a maximum tax credit of £800,000 – a significant benefit.
"This is a very positive change but a few points remain that may be addressed in consultation. For example the decision to start the new credits in April 2013 has the potential to delay production this year if companies choose to pause in anticipation of the changes. Further, there is a question mark over who will get the net benefit of these changes. There is an obvious advantage for inward investment but there is a concern that it is the broadcasters who will see the end benefit, with a squeeze on production companies being forced to reduce their overall programming costs as a result of obtaining the tax credit.
"Another issue introduced in today's Budget which impacts the broadcasting industry is the change to the Enterprise Investment Scheme, which is set to come in to force on April 6, 2012. The expectation was that limit would be changed from the current £2 million to £10 million, but the Chancellor has announced that it will now be £5 million. This is still an increase, but is a little disappointing, particularly for larger budget films, and whilst positive, will simply not have the same impact."
For further information, please contact:
Emma Ap-Thomas, PR Manager, 020 7728 2348 or firstname.lastname@example.org
Notes to editors:
We will have a selection of reaction videos featuring partner opinions on our website discussing all major themes of the Budget 2012. Please visit www.grant-thornton.co.uk for further information.
Grant Thornton UK LLP is a leading business and financial adviser with offices in 28 locations nationwide. We are a member firm within Grant Thornton International Ltd, one of the world's leading international organisations of independently owned and managed accounting and consulting firms. Clients of member and correspondent firms can access the knowledge and experience of more than 2400 partners in over 100 countries and consistently receive a distinctive, high quality and personalised service wherever they choose to do business.
Copyright (©) 2012 Grant Thornton UK LLP. All rights reserved.