There was an almost audible collective sigh of relief across the British film industry when the Chancellor of the Exchequer Gordon Brown announced March 16 that the United Kingdom's Section 48 movie p
LONDON (The Hollywood Reporter) -- There was an almost audible collective sigh of relief across the British film industry when the Chancellor of the Exchequer Gordon Brown announced March 16 that the United Kingdom's Section 48 movie production tax relief would be extended through March 2006.
It was the statement for which the movie production community here had been waiting, and it put an end to months of speculation surrounding the United Kingdom's system of tax breaks.
Brown's move means that a slew of productions -- which found themselves in limbo waiting to see if financing available through a tax break could be added to the balance sheet -- are greenlight-bound.
There were also reports of production execs in France, Spain and Germany trying to access info on Brown's speech to find out if they could finalize financing on movie co-productions with the United Kingdom.
Film London, the government-backed organization established to encourage filmmakers to come to the British capital to shoot, said Brown's move was vital.
"Tax relief plays a very significant part in attracting inward investment to London, and I am delighted that the government has reiterated its support of this," Film London chief executive Adrian Wootton said.
And it wasn't just the extension to Section 48 that was welcomed. The industry was also relieved to hear Brown pledge to "replace existing reliefs with new tax reliefs for both low-budget and larger-budget films."
As with everything, the devil is in the details. Following Brown's headline-grabbing announcement, the Treasury Department later issued further details. The extension means that any film commencing principal photography before April 1, 2006, and completing it by Jan. 1, 2007, will be eligible for the relief.
The government pledged to replace the country's big-budget movie tax incentive, Section 42, with "a structure similar to the new tax relief model that has previously been proposed for low-budget films."
The Treasury said it plans to undertake an intense period of consultation with the British film industry. Everyone is clamoring to be part of those discussions.
The U.K. Film Council CEO John Woodward thinks the government's decision to consult formally with the industry on tax reliefs for both low- and high-budget feature films "will ensure the longer-term viability of the film industry."