British film industry tax breaks approved by EU

Under the scheme, film production companies can claim tax relief of 25 per cent payable towards the cost of production.

Chancellor George Osborne said he hoped the move – first announced in the Budget – would help attract more blockbuster productions to the UK.

The BBC reports that the move needed to be passed by the EU under state-aid rules that control government support for companies.

EU state-aid rules control the giving of a competitive advantage to companies through government support.

Mr Osborne said: “These tax credits, that support both film and TV production, create around £2bn worth of business for Britain.

“That’s many thousands of jobs and lots of different industries, not just acting but film-making and costume design and set design.

“All of those things are really brilliant jobs supported by this brilliant industry. It’s also a great advert for the country.”

The chancellor made the announcement on the set of Agatha Raisin, a Sky One TV detective series being filmed in Wiltshire. The show, starring Ashley Jensen, is one of the TV series which is benefitting from the scheme.

The measure means a British film costing £40m would get an extra £1m towards production costs.

Amanda Nevill, chief executive of UK film body the BFI, said: “The film tax relief is a key ingredient in the UK’s winning combination of outstanding film-making talent and crews, world-leading studios and facilities, and iconic locations.

“It keeps us competitive on the world stage, and helps grow our economy and create jobs at home.

“We warmly welcome this extension to the tax relief and the government’s continued commitment to the UK’s thriving film industry.”

The tax breaks have already funded £8bn of production costs, including films such as Gravity, Maleficent and Harry Potter.

The Treasury said 222 films received such support in 2014.