DCMS quells prospect of enhanced HETV tax credit

The government has quelled hopes of introducing enhanced tax incentives for domestic high-end TV (HETV) productions.

In its British Film & HETV report published earlier this year the Culture, Media and Sport (CMS) committee recommended a targeted uplift to HETV productions at the lower-budget end – costing between £1m and £3m per hour. It called on the BFI to conduct analysis on the ROI of an uplift, which it believed could best benefit PSBs and indies rather than incentivising streamers to spend more on productions.

In its response to the committee’s recommendations, DCMS said there is a “multitude” of factors to take into consideration when deciding on tax reliefs beyond return on investment and sector impact.

“The government is committed to ensuring that all public money is spent and targeted effectively across the full breadth of the creative industries and the economy. The chancellor makes decisions on tax policy at fiscal events in the context of the wider public finances,” it added.

Government also rejected the CMSC’s proposal for productions claiming Audio Visual Expenditure Credit (AVEC) to provide a breakdown of their spending across the nations and regions, saying it would “introduce additional complexities”.

“One of the major attractions of the UK’s tax incentives, beyond their competitiveness, is the ease, simplicity and consistency of the process,” it said.

The CMSC’s suggestion of a 5% streamer levy was also rejected, reiterating culture secretary Lisa Nandy’s dismissal of the idea in May, with government noting it wants a “healthy, mixed film and TV ecology”, and the sustained production of culturally relevant UK content.

It cited streamers’ contributions and investments into the domestic sector, namechecking Amazon’s Prime Video Pathway training programme and Disney’s collaboration with the National Film and Television School. It also noted the £275m contribution Bridgerton has made to the British economy over the past five years.

It continued: “One of the benefits of a mixed ecology is that producers can strike deals both with streamers, which typically involve higher upfront fees, and with PSBs, whose terms of trade mean that secondary rights normally remain with the producer.

“We are mindful, therefore, of the importance of enabling strong inward investment given the benefits it provides for our domestic industry and wider economy, and we have no plans to introduce a levy on SVoD services.”

Elsewhere, government agreed with the CMSC’s view that any future public funding for ScreenSkills be linked to specific, measurable outcomes based on it meeting its performance indicators. The DCMS noted the training body’s five-year strategy and encouraged it to “remain ambitious in its goals”, despite criticism from the select committee.

Laura Mansfield, chief executive of ScreenSkills, welcomed the government’s recognition of its strategy.

“The DCMS has reaffirmed its commitment to supporting our talented film and high end-TV industry. We now need to work with the Government to make sure this leads to growth and quality jobs across the sector,” she said.

“As an ambitious organisation we are committed to building upon our successes and confronting the challenges that face the industry right across the UK.”

She repeated the organisation’s commitment to increased partnership and collaboration to meet these challenges.

“This first year of our new strategy lays foundations for a future-ready workforce. Our ambition is to lead on skills, drive long-term impact, and ensure the industry has the talent it needs to thrive,” she added.

CIISA funding

In asking government to consider “all options” for funding bullying and harassment watchdog the Creative Industries Independent Standards Authority (CIISA), the committee urged the introduction of a levy for all industries under CIISA’s purview to help fund its work.

However, the DCMS said it currently has no plans to introduce “additional complexities…or additional statutory burdens on businesses that may both deter inward investment and have an unsustainable impact on smaller businesses”.

It said it will continue to work with industry on an ongoing basis reiterating Nandy’s “clear and unequivocal” support for CIISA’s work.