VFX Company Tax Breaks

Tax breaks seem very self explanatory, however, if you're not familiar with them then its not money off the tax that the studio would pay but incentives such as money up front to use companies and locations within certain countries. A lot of companies look towards these tax incentives to reduce the overall cost of the production of the film, additionally, there can be a problem with this. The companies in areas with no tax incentives have to lower their costs to match those that do have the tax incentives, so there is a chance a company could actually lose money.

This article (Link) is an interesting read on tax incentives and notes that a lot of tax incentives are 30% of the budget of the film being produced. Additionally, the author notes that London is now on par with the US with Visual Effects due to the tax incentives set out by the government. There is a downside to this, US states that remove the tax incentive begin to lose interest from the Film Industry almost straight away and if the tax incentive isn't in place for a long enough then VFX companies either have to move to another tax incentive area or close down. London VFX companies are still going strong due to the 25% under £20 million films and 20% over £20 million tax incentives. A surprising end to the article is that the author notes that if all the tax incentives went away, VFX companies would be judged on skill not where they are situated, meaning that everyone would be on a equal playing field and companies would be pitched against each other.

Two CEOs noted in this article (Link) that 75% of the VFX work would be lost if there were no tax incentives within the UK. This is interesting to note as someone that wants to work in the VFX industry that if the government chose to remove the tax incentive then there is a possibility I would never get a job within the UK.