UK-BASED FILMS are under threat from closure, suggests this morning's Times, as changes to the partnership taxation rules on film financing have now closed production rather than opened possibilities for the film industry.
Alterations to the film taxation regime are in discussion at present, to try and encourage more investment in the UK, however, the recent closure of a loophole concerning contributions to partnership businesses has now struck film investment as the Revenue believes partnerships are being abused to offset earning from one company against earnings at another.
Worst hit so far is Tulip Fever, says the Times, a £24m working of a novel starring Jude Law and Keira Knightley, which shed 80 employees last week and will be abandoned if £8 million in lost funding is not replaced.
Product providers and life insurers are about to resume their campaign to move the 1% cap on Sandler-based ‘stakeholder’ products, adds the Times, ahead of the FSA’s report to the Treasury on Sandler products regulation.
The FSA is due to report to the Treasury in May – several months more than first anticipated – but there are still worries at this stage the FSA will stick to the government’s plans for a 1% cap and drive down profit margins of life offices.
Even Legal & General, which has in the past had interest in Sandler products where other firms have not, says it would be difficult to offer them if the FSA acts to impose tough regulations and several insurers have vowed to boycott the products if the 1 per cent regime is enforced.
The government’s trade and industry secretary Patricia Hewitt is still considering legislation to curb the huge payouts company executives are receiving as salary and “golden hand shakes”.
A source from the DTI told the Guardian "…the sensible thing to do is to look at this year's reporting season and to take appropriate action if our monitoring suggests it is necessary, rather than go for a knee-jerk response, but if that doesn't work we are not ruling out further action."IFAonline
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