{"id":6416,"date":"2015-10-01T15:22:34","date_gmt":"2015-10-01T19:22:34","guid":{"rendered":"http:\/\/worldscreen.com\/tveurope\/give-me-a-break\/"},"modified":"2016-01-27T14:47:19","modified_gmt":"2016-01-27T19:47:19","slug":"give-me-a-break","status":"publish","type":"post","link":"https:\/\/worldscreen.com\/tveurope\/2015\/10\/01\/give-me-a-break\/","title":{"rendered":"Give Me a Break"},"content":{"rendered":"

Joanna Stephens explores the tax incentives that are reshaping the U.K.\u2019s production landscape.<\/em><\/p>\n

It just got a whole lot cheaper to make expensive television in the U.K. Under the country\u2019s new high-end TV (HETV) tax-relief system, producers can claim a rebate of up to 25 percent of U.K. expenditure on scripted tele\u00advision projects that cost at least \u00a31 million per hour. This offer cost the U.K. government close to \u00a380 million in the scheme\u2019s first year of operation.<\/p>\n

With the possible exception of a couple of Treasury mandarins, nobody\u2019s complaining\u2014unless it\u2019s to grumble that it is not as easy anymore to find first-rate crews, studio space and post facilities. \u201cBut that\u2019s a nice problem to have,\u201d suggests John McVay, the chief executive of Pact, the trade association that represents the commercial interests of the U.K.\u2019s indies. \u201cI\u2019d rather have that than layoffs and mass industry unemployment. The net effect is that the TV credit is helping attract jobs to the U.K., which has to be a good thing for this country\u2019s highly skilled creative workforce.\u201d<\/p>\n

McVay\u2019s view that the HETV relief is \u201cgreat news\u201d for British companies will be shared by the on-the-ground agencies that worked closely with the government to craft a scheme that is simple, user-friendly and tied up with a minimum of red tape.<\/p>\n

\u201cMost of the systems on offer around the world require you to jump through hoops or work with local co-producers in order to qualify [for a credit],\u201d McVay says. \u201cBy contrast, the U.K. credit is really easy and transparent. The cultural tests are straightforward, the credit is bankable immediately upon receipt, it\u2019s safe, it\u2019s secure and it\u2019s been tested over the years via the film tax-credit system. We don\u2019t hear any complaints.\u201d<\/p>\n

As McVay notes, the TV relief emerged from the longer established tax credit for feature films, which was introduced in 2007 in a bid to stop the hemorrhage of productions to countries with lower costs and wages. The HETV credit became available in April 2013, and it was enhanced last April, reducing the required minimum spending in the U.K. from 25 percent to 10 percent of a budget of at least \u00a31 million per broadcast hour. Meanwhile, the gateway to HETV relief for drama, animation and documentary\u2014a points-based cultural test\u2014is in the process of being modernized to make it easier to assess whether a project is sufficiently \u201ccultural\u201d to access the credit.<\/p>\n

The impact of the new tax reliefs for premium television and animation content was revealed earlier this year by the BFI, further underlining the scheme\u2019s success in helping boost the U.K. into the production major leagues. In its first full year of operation, a total of 87 HETV programs commenced principal photography in the U.K., of which 22 were foreign, 60 were domestic and 5 were co-productions. The 22 foreign projects\u2014\u201cinward investment\u201d\u2014had the largest share of U.K. spend, with \u00a3286.7 million of the \u00a3615.2 million total. Among the major international dramas that contributed to the 2014 results were Downton Abbey<\/em>, Outlander<\/em>, Game of Thrones<\/em>, Wolf Hall<\/em>, 24: Live Another Day<\/em>, Poldark<\/em> and Grantchester<\/em>.<\/p>\n

Meanwhile, the Treasury doled out \u00a379 million in tax credits to HETV projects. The payback, however, was a massive uptick in production expenditure, which reached more than \u00a3395 million\u2014some \u00a3225 million of which consisted of inward investment\u2014from an estimated \u00a350 million the year before the new credit was introduced.<\/p>\n

The HETV results come amid a very strong year for U.K. production across the board, with film production surging by 35 percent in 2014 to reach a record \u00a31.47 billion.<\/p>\n

\u201cThe statistics demonstrate just how popular the U.K. is for international film and television productions,\u201d says Adrian Wootton, CEO of the British Film Commission (BFC). \u201cOur tax reliefs, world-class crews, state-of-the-art facilities and award-winning talent are a formidable package.\u201d And, as McVay observes, the tax credit is also allowing U.K. drama producers to \u201ccompete on more equal terms with our friends in the U.S.\u201d<\/p>\n

IN THE HIGHLANDS<\/strong>
\nOne of those friends in the U.S. is cable network Starz, which has a long history of filming in the U.K., most recently with Sony Pictures Television\u2019s Outlander<\/em>. The drama, based on a series of novels by Diana Gabaldon, was shot on location in Scotland.<\/p>\n

Carmi Zlotnik, the managing director of Starz, points out that the network started shooting another of its hit series\u2014Da Vinci\u2019s Demons<\/em>\u2014in the U.K. well before the HETV scheme was in place. \u201cThe U.K. has always been an attractive place to work, but this scheme has increased its attraction a significant degree,\u201d he says, singling out the country\u2019s \u201cbrilliant\u201d pool of creative talent, both in front of and behind the camera. \u201cWhen you\u2019re shooting in Britain, you realize just how fine the actors are there,\u201d he adds. \u201cIt\u2019s not just the leads\u2014you can get great actors in your third and fourth tiers of acting talent.\u201d<\/p>\n

Zlotnik\u2019s first experience shooting in the U.K. was with HBO\u2019s seminal miniseries Band of Brothers<\/em>. But for all his enthusiasm about British production capabilities\u2014which, he notes, are being constantly upgraded due to the amount of work now flowing into the country\u2014he acknowledges that \u201cthings work differently\u201d on the U.K. side of the pond. There are differences not only in creative culture (\u201cBritish directors are used to taking more possession of a show\u201d), but also in the practicalities of how hours, shooting days and budgets are structured.<\/p>\n

Comparing the U.S. and U.K. paradigms, Melissa Harper, Starz\u2019s senior VP of original programming production, says U.K. TV budgets have historically been smaller than their U.S. counterparts, and have been structured over series rather than episodes. \u201cIt\u2019s manageable to track a six-episode limited series with, say, a $6 million budget to be spent over the course of the project,\u201d she adds. \u201cBut with the very high-end series of the sort that you\u2019d find on Starz, which could run up to $4 million per episode, the spend is so significant that it can\u2019t be looked at on a series basis, but [must be considered] on an episodic basis.\u201d<\/p>\n

Harper calls the lowering of the HETV credit\u2019s qualifying threshold in April a \u201cfantastic move\u201d for U.K. competitiveness, one that will \u201ccontinue to mark the U.K. as a leading destination for us to generate premium content.\u201d<\/p>\n

The next example of that premium content comes in the form of Close to the Enemy<\/em>, by the award-winning writer and director Stephen Poliakoff. The six-part series for Starz and the BBC is set in bomb-ravaged London at the start of the Cold War. Filming is taking place in and around Liverpool and London for a 2016 broadcast.<\/p>\n

TALENT POOL<\/strong>
\nThe booming demand for crews, studios and post-production facilities as work floods into the U.K. is certainly \u201cpart of the conversation\u201d when considering where to shoot, Harper says. \u201cFortunately, the U.K. is one of a handful of places in the world with the depth of talent and the educational resources to support growth.\u201d<\/p>\n

Indeed, the British government is investing heavily in training people to develop the skills needed to handle the increase in production generated by the new incentives. Via a series of Skills Investment Funds targeted at film, high-end TV, children\u2019s content, animation, games and VFX, the government pledged in 2013 to invest up to \u00a316 million, matched by industry funding, bringing the total investment to \u00a332 million over two years.<\/p>\n

Meanwhile, studio space remains at a premium, with both pop-up and established facilities filled to capacity. The new Pinewood Studios expansion\u2014a \u00a3200 million scheme that will add a total of 100,000 square meters of new facilities, including 12 large stages, to the U.K. stock over the next 15 years\u2014will help ease the squeeze when the first phase opens in early 2016. But, for the time being, \u201cthere is simply not enough good studio space, or enough crews, to accommodate demand,\u201d says Tim Halkin, COO of Munich-based TANDEM Productions.<\/p>\n

The STUDIOCANAL production company recently shot the drama Spotless<\/em> in the U.K.\u2014a decision, Halkin says, that was directly influenced by the HETV credit. \u201cThe tax scheme really opened up the U.K. as an option where it hadn\u2019t been before. Given the higher costs associated with shooting in London, the credit has made it affordable and, more importantly on a creative level, has permitted a story set in London to be shot there. We can now consider going to the U.K. to shoot the U.K., rather than going elsewhere to simulate a British look and feel.\u201d<\/p>\n

AIMING HIGH<\/strong>
\nSo what\u2019s the take on the HETV credit within the U.K.? Andrew Critchley, the managing director of U.K.-based RED Production Company, speaks for many producers when he says the new incentive will help them achieve \u201cbigger, bolder series.\u201d With such gems as Last Tango in Halifax<\/em>, Happy Valley<\/em> and Queer as Folk<\/em> in its portfolio, RED is known for its ambitious, daring and engaging dramas\u2014precisely the sort of content that the HETV credit is designed to foster.<\/p>\n

\u201cThe scheme helps us to realize our creative aspirations,\u201d Critchley adds\u2014a sentiment echoed by Kate Harwood, the managing director of iconic production brand Euston Films. \u201cIt\u2019s a real game changer,\u201d Harwood says. \u201cIt\u2019s enabling us to pitch higher than we would previously have done. For example, I\u2019m currently pitching on a very big show against a major U.S. studio, and the only reason we\u2019re in the game is because of the tax break. And if we get the project, we can now afford to shoot it here, using British talent to tell a British story.\u201d<\/p>\n

The production company behind such classic British series as The Sweeney and Minder<\/em>, Euston Films was relaunched late last year by FremantleMedia UK after a 15-year hiatus. BAFTA-winning Harwood\u2014formerly the BBC\u2019s head of in-house drama\u2014was brought in to run the revived brand, with ex-BBC colleague Noemi Spanos as head of development. Building on Euston\u2019s legacy of producing groundbreaking content, Harwood and Spanos are looking to create high-end, high-profile dramas with global reach.<\/p>\n

Harwood makes the point that the HETV credit is good news not only for the U.K. industry, but also for U.K. audiences. \u201cIt has to be a blessing for us culturally to see our stories represented in an authentic way, rather than being presented in inauthentic locations, so I think an interesting indirect benefit of the scheme is that it will encourage more larger-scale British-based storytelling.\u201d<\/p>\n

Another interesting side effect of the scheme, Harwood adds, is that it has provoked several foreign tax funds to be more generous, because they are now competing against the U.K. system for English-language drama.<\/p>\n

\u201cAll in all, it\u2019s fabulous for production in this country,\u201d Harwood concludes. \u201cStudios are filled, and actors and directors are employed. It has also coincided with a big boom in long-form TV drama, so it\u2019s happy days all around.\u201d<\/p>\n

NOT THE USUAL SUSPECTS<\/strong>
\nThe love is also spreading to various regions of the U.K., as producers look beyond the production heartlands of London and South East England for affordable\u2014and available\u2014facilities and locations. Creative England reports a record year of filming inquiries across the regions, with requests up 54 percent on 2014. \u201cThere\u2019s no prejudice these days about producing in the regions,\u201d says Pact\u2019s McVay. \u201cGame of Thrones<\/em>, for example, was shot in Ulster and Da Vinci\u2019s Demons<\/em> in a converted car factory outside Cardiff. It\u2019s about the right project at the right place, in the right facility.\u201d<\/p>\n

For ITV Studios\u2019 Beowulf: Return to the Shieldlands<\/em>, an epic reimagining of the life and times of one of literature\u2019s great heroes, that right place is up in the rugged landscape of northern England. \u201cWe are shooting around Northumberland and Durham, as [Beowulf<\/em>] is set in an 8th-century fantasy world, and the magnificent landscapes and varied locations make it ideal for our needs,\u201d says Katie Newman, who co-created and is executive producing the project with James Dormer and ITV\u2019s Tim Haines.<\/p>\n

The series is set in mythical Shieldlands, where fantastical creatures live alongside the heroes and villains. Newman says the HETV credit was a major factor in the decision to produce in the U.K. For a 13-part series of the scale and ambition of Beowulf<\/em>, \u201cit\u2019s unlikely we would have been able to afford to shoot in the U.K. without the new tax-relief scheme,\u201d she adds. \u201cWe would have had to look at other countries with tax breaks.\u201d<\/p>\n

Francis Hopkinson, creative director of drama at ITV\u2008Studios, points out that five years ago dramas set in the U.K. were mostly filmed in Eastern Europe. \u201cIt was the only way producers could afford to make them,\u201d he says. \u201cNow, for a drama set in Britain, like Lucan<\/em> or Jekyll and Hyde<\/em>, the scheme makes it possible to film it here.\u201d<\/p>\n

Other high-end ITV dramas that were filmed in the U.K. regions and that benefited from the HETV incentive include the crime series Shetland<\/em>, shot in Scotland and, appropriately, on the Shetland Islands themselves, and Jericho<\/em>, filmed in North Yorkshire.<\/p>\n

Gail Kennett, who has worked on a host of ITV\u2008Studios\u2019 dramas, praises the HETV credit\u2019s user-friendliness. \u201cWe\u2019re now pretty familiar with how it works,\u201d she says. \u201cIt\u2019s comparable to other European and international incentives, but the major advantage of the U.K. scheme is that we can use the same currency, so we aren\u2019t subject to exchange-rate fluctuations.\u201d<\/p>\n

In the end, however, the decision as to where a drama is filmed should be a creative rather than a commercial one, ITV Studios\u2019 Newman says. In the case of Beowulf<\/em>, there was no doubt in the minds of the creative team that the U.K. was the best and most authentic place for it to be shot.<\/p>\n

The latest BFI figures, released in late July, indicate that the U.K.\u2019s production boom is set to continue in both film and TV. In the first six months of this year, \u00a3594 million has been spent on 79 films and \u00a3279 million on 30 HETV productions, including the final season of Carnival Films\u2019 Downton Abbey<\/em>, Daybreak Pictures\u2019 Churchill\u2019s Secret<\/em>, Starz\/BBC\u2019s The Dresser<\/em> and the third installment of Mammoth Screen\u2019s Endeavour<\/em>.<\/p>\n

\u201cThere\u2019s a sort of gold-rush feel at the moment,\u201d says Euston Films\u2019 Harwood. \u201cUntil things settle down, there will inevitably be strains on crews and studios, and costs are bound to rise. But generally, it\u2019s a blessing.\u201d<\/p>\n

Pact\u2019s McVay agrees: \u201cIt doesn\u2019t take much for the world to change, as we saw with the recession. But at the moment I\u2019m seeing a very buoyant, very confident production industry across the U.K., both indigenously and in terms of inward investment.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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It just got a whole lot cheaper to make expensive television in the U.K. Under the country\u2019s new high-end TV (HETV) tax-relief system, producers can claim a rebate of up to 25 percent of U.K. expenditure on scripted tele\u00advision projects that cost …<\/p>\n","protected":false},"author":1,"featured_media":6417,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[76],"tags":[],"class_list":["post-6416","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-features"],"yoast_head":"\nGive Me a Break - TVEUROPE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/worldscreen.com\/tveurope\/2015\/10\/01\/give-me-a-break\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Give Me a Break - TVEUROPE\" \/>\n<meta property=\"og:description\" content=\"Joanna Stephens explores the tax incentives that are reshaping the U.K.\u2019s production landscape. 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