The study by Oxford Economic Forecasting (OEF) shows the uncertain tax regime for film has led to a steep drop in inward investment in films, down£225m to an estimated£324m in 2005.
The report, backed by the UK Film Council and Pinewood Shepperton, detailed the impact of the UK film industry on the economy and showed the downturn would cost the Exchequer£329m a year in lost revenues.
Speaking at the study's launch, Pinewood Shepperton chairman Michael Grade described the UK film industry as "in a state of flux". The studio has issued two profit warnings this year.
According to OEF, the UK film industry contributed£3.1bn to the economy last year, generating£850m in tax revenues.
The Section 48 and Section 42 tax breaks for UK film productions are to be phased out next year and replaced with a scheme of tax credits, the detail of which has not yet been spelt out.