More from Sam's notes on the Fund Your Feature seminar held in Bristol last week, this instalment focusing on the tax credit system and co-productions with foreign companies...
The third session was by Nigel Burke from the Tenon group about the new tax credit system that came into legislation only a week or so ago in the UK. I won’t try and cover it all here except to say that, despite the bad-mouthing of the system by a later speaker (possibly because he knew all the wheezes the old one was susceptible to) it looked remarkably straightforward.
The basics of it are that you have to pass a ‘cultural’ test to secure tax credits, assuming you are producing through a company/entity that pays UK tax in the first place and at least 25% of the film must be produced in the UK, though how you achieve that 25% is a movable feast.
You need to score at least 16 out of 31 on the test, and the more of the film that is made in the UK the better your chances of doing this. If the film is set in the UK, even better. There is a sliding scale for some questions, including the one about whether the film represents British culture or not.
In an age where what it means to be British is a debatable thing the recommendations of ‘castles’ and ‘the royal family’ got an ironic laugh from the audience. Another quirk of this cultural test is that you qualify as representing British culture if you set the film in any part of the British Empire at a time when Britain was the occupying force. This seems slightly backward looking to me, but there you go.
Airfares can qualify if they are flying in to the UK, but not out. British characters score more points than British actors – John Malkovich playing a Brummie carpet fitter scores you more points than Martin Freeman as a Hollywood pool cleaner for instance. And characters need to be British whilst actors score you points if they are from anywhere in the EEA (European Economic Area)
An important distinction made in the session was that the credits are based on ‘consumption’ rather than ‘origin’ – so a set built in Britain wouldn’t qualify if it were shipped to France for shooting. Conversely if a soundtrack is composed in France but recorded in the UK, it would qualify for tax credits.
Tax credits can go as high as 25% for small films (under £20m) and 20% for above. When you apply you’ll need the DEMS certificate that proves it’s a ‘UK” film, your accounts, and the tax return.
Fourth session: Co-production with foreign companies. Mike Downey, Film and Music Entertainment; Marit van den Elshout, Cinemart Co-Production Market; Steve Walsh, East West Films. All the above were experts in sourcing production overseas.
This talk was generally more anecdotal, in fairness to the panel that was because a lot of them had not found out the minutiae of the new legislation yet and tended to have stories about the old system. I have less notes for the rest of the day starting here as there was an increasing amount of repetition, but there was some interesting points from this panel. The key thing with foreign investors is that before you look abroad you need to make sure you have a ‘cornerstone’ of UK investment.
Mike Downey was adamant that if you were struggling for investors you should never cut your budget as it means your film will suffer. Personally I wasn’t sure if everyone had that leeway but it was an interesting point.
The panel said there were a series of festivals that were must-go-to and Cinemart was one of them. They said, unsurprisingly, that a lot of deals get done in the downtime and that’s when it’s best to approach financiers. Cinemart was a good one to go to particularly because people are actively looking for projects, unlike Cannes, where everyone is selling.
Tomorrow, the importance of pre-sales/sales agents, the legal pitfalls of production, and more...