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Monday, 22 April, 2002, 17:01 GMT 18:01 UK
Tax 'threatens' TV drama
Bob and Rose was a big hit on ITV1
Bob and Rose was a big hit on ITV1
TV producers are warning that the quality of drama on the small screen will suffer after Chancellor Gordon Brown ended an important tax break in last week's Budget.

The concession was to help investment in short drama serials, such as Cold Feet, and one-off TV movies like Julie Walters' A Beautiful Son, both winners at the Bafta TV awards on Sunday.

This means millions of pounds of production might not happen

Pact spokesman
It added 10% to a production's budget and was set up in 1997 to encourage investment in movies.

It was extended to TV dramas in 1999 and series including the Bafta-nominated Bob and Rose and Clocking Off benefited from the scheme.

However the concession has now been axed because of a loophole which allowed long-running programmes such as Coronation Street to be subsidised.

Walters was named best actress at the Baftas
Walters was named best actress at the Baftas
The chancellor has now restricted the tax break to UK films which will be released in commercial cinemas.

Andrew Critchley, from Red Productions, the company behind Bob and Rose and Clocking Off, said a number of their projects could be under threat.

He told BBC News Online: "It is potentially very damaging. It will affect all our forthcoming productions.

"It will drastically limit our ways of getting investment, especially because this new scheme came into existence as of the day of the Budget, there was no interim time to deal with the effects."

Red Productions have agreed to help a campaign by the Producers' Alliance for Cinema and Television (Pact), which represents independent production companies, to reverse the decision.

A Pact spokesman told BBC News Online: "This means millions of pounds of production might not happen.

Clocking Off was nominated for a Bafta
Clocking Off was nominated for a Bafta
"It could mean anything in production now could be stopped, anything in the development stage could be axed and production companies from abroad could stop investing in work in the UK."

The chancellor ended the "sale and leaseback" tax break because it was felt that the system was being abused.

Once a production was finished, a producer could sell it to investors, who leased it back for a 15-year period, and over that time the producer would only have to pay 90% of the cost back.


Last year the chancellor extended the tax break for film production until 2005.

However some TV companies were defining what actually constitutes a "film" to include single episodes of drama series like Coronation Street.

Mr Critchley said he had heard some extreme examples of companies seeking the tax break.

He said: "We heard reports that a hotel which had a moving image on their website claimed a tax break because they said it was a film."

The measures introduced in last week's Budget ends that.

Inspector Morse had backing from US networks
Inspector Morse had backing from US networks
But it also means that drama serials, including the new ITV1 series on Henry VIII, will have to be re-budgeted.

The Pact spokesman said that, in the past, US TV companies would provide some of the production's budget, but that was under threat now as well.

"Programmes like Inspector Morse used to rely heavily on money from American public service channels, who would provide some of the funding so they could show it on the TV there," he said.

"However the American networks are suffering financial difficulties and are focusing now on making their own programmes rather than investing on British crime drama."

See also:

07 Mar 01 | Budget 2001
Budget boosts UK film industry
23 Jan 01 | Entertainment
Record year for UK film
02 May 00 | UK
22m boost for British films
01 Oct 00 | Entertainment
Film Council eyes the box office
22 Mar 99 | e-cyclopedia
Brit flicks: But are they really British?
27 Aug 99 | Entertainment
Boost for British film industry
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