Tax avoidance is very bad, very bad indeed

Except, of course, when it’s for luvvies:

The boom has in part been fuelled by the introduction of tax credits for high-end drama TV, shows that cost more than £1m per episode such as Game of Thrones and The Crown, and longer-standing breaks for films that pass a “cultural test” or are a qualifying co-production. These carrots have helped stop big-budget film and TV productions going to cheaper locations, such as eastern Europe, bringing in increased investment and attracting new players like Netflix and Amazon.

HMRC figures show that £340m was paid to 530 claims for film tax relief in the year to the end of June, and £96m for 115 claims relating to high-end TV. Another £45m was paid out relating to video games developed in the UK.

It’s lovely. They get all outraged about footballers and singers putting the money in to get the tax breaks. And then applaud the things made as a result of the tax breaks.

7 thoughts on “Tax avoidance is very bad, very bad indeed”

  1. Funny thing is that while Labour were bringing in tax breaks for films and the like, they were funding it by cutting back on capital allowances for industrial investment and also killing off finance leasing from banks which had funded the likes of Toyota, Nissan and a whole bus load of inbound industrial investment in previous decades.

  2. What’s that? Incentives matter? Some work is globalised so we have to be competitive?

    Of course, LVT would fix this problem without a department of bureaucrats handing tax credits out as filming in Northern Ireland and Newport would be really cheap.

    I love the “despite Brexit” stuff. Almost none of this filming is coming from Europe. Netflix are in the USA, The Harry Potter stuff is Warners, in the USA (although I’m guessing that it’s the UK Heyday Films making it). Marvel make stuff here. Spielberg makes stuff here. Star Wars was made here (puzzle woods up in the Forest of Dean if anyone’s curious).

    And it’s for a number of reasons: technical expertise, scenery, language and tax breaks. When you need a few actors to play English speaking bad guys in Indiana Jones, it’s much easier to find them in the UK than in France.

    It’s why I’m not at all nervous about the future post-Brexit. The growth in trade is about things like this, and language is a big expense. It’s why production is about places like Canada, USA, New Zealand, UK. The other places where there’s growth are where it’s really cheap, like China, where yes, there’s translation issues, but when your crew are less than half the US price, why not?

  3. Why only give tax breaks to certain industries? Once you’ve acknowledged that the tax breaks create more employment, more products, more wealth, etc, for fuck’s sake why not just cut taxes?

  4. for fuck’s sake why not just cut taxes?

    Because admitting the existence of the Laffer Curve would destroy their fragile little worlds?

  5. Squander Two,

    It’s about those industries that can be anywhere and can go where the tax is lowest. A bloke selling teddy bears dressed as yeoman of the guard has to be in London. He can’t relocate to Hull. Game of Thrones can be made anywhere that looks a bit rural and has some old castles. But the tax system doesn’t account for that. It doesn’t think like a negotiator of maximising income, that OK, maybe we only get a few percent from the filmmakers, but that’s better than nothing. So, you have these incentives.

    While I broadly support them in concept, they’re clumsy. You have say, filmmaking, but why not factories? Why not software? It’s why LVT works. If it’s a job that doesn’t depend on a particular location, it can probably be done in some cheap bits of the UK. So, wouldn’t you rather have factories in Hull, but they’re paying a few percent tax, than those factories in China?

  6. Bloke in Costa Rica

    Is there still a lot of post production and CGI going on around Wardour and Lisle Streets? Those are the ultimate in footloose industries; the way everything’s shot digitally these days an effects house can up sticks and move virtually friction free. It’s getting the bods to move that’s the problem but the facilities themselves are interchangeable.

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