Film Tax Relief reached £251m this year

James Nickerson
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Six British films were nominated for Oscars in 2015 (Source: Getty)

Government support for the UK film industry through Film Tax Relief reached £251m this year, generating over £1bn worth of investment in the UK.

Chancellor George Osborne, whose name appeared in the credits for the new Star Wars film due to the relief, said it was a sign that the golden age for British creative industries is going from strength to strength.

However, some have cast doubt on the benefits of the tax relief for the UK, with the profits going back to the producers. X-Men director Matthew Vaughn said to BBC Radio 4 he thinks "it’s crazy that we subsidise British movies with tax breaks but we don’t get any of that money back. We’re subsidising Hollywood. We’re service providers. We’re not an industry.”

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Indeed, Disney, which produced the new Star Wars film, has taken advantage of the scheme to take £170m in tax breaks since 2007, according to the Guardian.

Yet, the government maintains this tax relief is worth it as the Star Wars franchise is committed to making the new trilogy in the UK.

The benefits are backed up by a report published in February by the British Film Industry that found creative industries had flourished as a result of the the tax credits, and drew in huge investment. Directly, for each £1 in Film Tax Relief, £12.49 is spent making films in the UK, while indirect benefits such as increased tourism also arise.

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Osborne added: "2015 was a record year for the film industry and I’m proud that our support for this fast growing sector is securing investment, boosting productions and creating jobs across the UK.”

Data published today showed £1.5bn was secured by the UK film industry through the tax relief and led to more than £6.9bn investment from the film industry across the UK since 2007.

But Hot Fuzz director Edgar Wright previously said, in an interview for the release of The World's End, it does not necessarily help the British industry: “While the tax break is good for Hollywood films shooting here, it’s probably not that great for British films shooting in the UK. Some middle-to-low budget films are going to find themselves without crew because all the American films are shooting here.”

The rules allow for a rebate of 25 per cent for films that pass a cultural test and have spent at least 10 per cent of their production costs in the UK.

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