The United Kingdom, already a leading international hub for filming, is doing even more to roll out the red carpet.
Among the key changes, the government said it would offer a 25% credit on the first $32.7 million of qualifying production expenditure, and 20% thereafter. Currently, such projects could only claim a 20% rebate.
Additionally, companies wouldn't have to spend as much in the country to qualify for UK film credits. The government would reduce the minimum UK expenditure requirement from 25% to 10%.
The changes also would make it easier for films to pass the so-called "cultural test," which is used to qualify productions for incentives, and would extend the current tax breaks that apply to film and TV to Britain's already vibrant visual effects industry.
The move would likely put further pressure on Southern California's visual effects industry, which has been buffeted by effects outsourcing and foreign subsidies.
Unlike California's film tax credit, the UK does not have budget caps on film, and also allows above-the-line costs, such as the salaries of actors, writers and directors to be offset by incentives.
Nonetheless, the news was welcomed by the British film industry.
“The UK is home to world-class filmmaking talent and expertise which help drive the industry forward, as demonstrated recently by the UK-produced and critically acclaimed 'Gravity,'" said Adrian Wootton, chief executive of the British Film Commission and Film London. "However, in order to continue to attract business to the UK in a fiercely competitive global marketplace, our industry must be underpinned by effective fiscal incentives. The tax relief was a game changer when introduced in 2007 and today’s announcement ensures we can continue to grow our industry."
The tax changes, unveiled in statement from UK Chancellor of the Exchequer George Osborne, would take effect April 2014 and are subject to legislative approval.
Since its film incentive took effect in 2007, the UK's film industry has taken off. Britain has become a major destination for high-profile Hollywood movies, including Marvel's "Thor: The Dark World" and "Captain America," and "Gravity."
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