Britain Proposes Tax Aid for Its Sluggish Film Industry : Entertainment: The companies welcome the plan but say it doesn’t go far enough.

The flagging British film industry welcomed new tax-relief measures proposed by the country’s Conservative government this week. But filmmakers said the steps, designed to stimulate feature production in the United Kingdom, did not go far enough.

“Disappointing,” said Giselle Dye of the British Film Institute. “But a step in the right direction.”

In laying out the government’s budget plans for the coming year, Chancellor of the Exchequer Norman Lamont said Tuesday that he was proposing measures to address “the cash-flow problems that may be caused by the sometimes lengthy gap between the completion of a film and its release.”

One proposal would allow producers to write off pre-production costs as they are incurred, as opposed to the current system under which costs cannot be written off until a film is released.

A second measure would enable film companies to write off production expenditures at a rate of one-third per year, starting immediately upon completion of a film--again speeding up tax relief.

“It’s going to be a help, but how much remains to be seen,” said John Woodward, chief executive of the London-based Producers Alliance for Cinema and Television.

Officials have been seeking ways to increase indigenous British film production and also encourage the Hollywood studios to film in the country.

According to the British Film Institute, U.K. film production hit an all-time low in 1991, with only 12 films produced solely with U.K. money. Investment in British films declined from $472 million in 1986 to $138 million in 1990.

Theater admissions have nearly doubled the last six years, with more than 100 million tickets sold in 1991. But the box-office profits were earned almost entirely by Hollywood movies.

Wilf Stevenson, director of the British Film Institute, issued a statement welcoming the budget proposals but adding: “Two of the three tax changes sought by the U.K. film industry have been ignored. There have been no tax incentives for investors, nor have the rules which penalize the taxation of foreign stars who work in the U.K. been changed.”

Britain’s Labor Party has declared that it will provide stronger measures to support British films if it wins national elections April 9.