ASK & DISCUSS INDEX

8 years, 5 months ago - Paddy Robinson-Griffin

https://www.gov.uk/hmrc-internal-manuals/film-production-company-manual/fpc40020 gives the context :). I'm not legally trained, just a pragmatist that no small £3k short can even afford the court case should it come to a tussle, and to a tussle it'll surely come if there's a growing influx of short films with zero realistic chance of theatrical release. Someone will be the test case I'm sure.

8 years, 5 months ago - John Lubran

Ah yes the FTR. The definitions for that are quite clear, though once again the 'guidelines' retain their not uncommon referal to the statutory ambeguity of some definitions. I imagine that for ultra low budget projects the issue is moot. In any event almost any kind of production ought to be a commercial enterprises per se and qualify for all the tax loss benefits that apply to all businesses.

8 years, 5 months ago - Paddy Robinson-Griffin

I think showing the intention is legitimate is the hard part. Going on in cinemas usually requires either a specific exemption from a local council or BBFC rating, so as there are no shorts theatrical distributors, and as it'll be a direct deal with the venue, perhaps the budget could/should reflect the associated costs if a producer wants to show a sincere intention?

8 years, 5 months ago - Marlom Tander

INTENT is the indeed the rub. There is no theatrical release market for shorts, so you can't, in good faith, have any intent for such a release. When did B features stop? I vaguely remember them from before I was old enough to see AA rated films...

It's not an issue for features because there is a theatrical circuit and so the intent is serious. Failure to achieve on intent is allowed :-)

The credit is a very generous one with very lax qualification checking compared to many. I really hope idiots don't blow it by taking the piss.

8 years, 5 months ago - Marlom Tander

You think the Gvt consults when it sees revenue drain? Brush up on Low Cost Traders and Flat Rate VAT scheme.

As soon as the Gvt felt that the FRScheme was being abused (mainly by "freelancers") they basically killed it with one line in the Chancellors Autumn statement. Tens of thousands of genuine businesses with turnovwers of between 20 and 200K now face running at a loss because they won long term contracts under one set of maths, and have just seen their gross margins halved or killed completely. I found a way through it for mine, but I'm lucky. And good, but in this case, mainly lucky.

8 years, 5 months ago - Chris Bogle

Well no, because the amount given in tax breaks to short films is always going to be a drop in the ocean compared to the multi-million pound features. The numbers aren't correct but you'll get the drift. A £10K short claims £2K back. A £3 million feature claims approx £750K back. So for every feature made you'd need to make about 350,000 short films at a 10K budget for the same tax impact. There are not nearly that many shorts being made in the UK annually - short film producers claiming tax rebates are simply not going to ruin the industry. What the chancellor will be looking for is fraud within the feature market.

If you can run a short film as a business (which you should because it's good professional practice), and get it theatrically distributed through the festival market I don't see how that is any less commercially valid than a feature. It's just a different, smaller business model.

8 years, 5 months ago - Chris Bogle

Told you I got my numbers wrong. Completely. Utterly. You'd need 350 shorts per feature for the same tax impact, which still is a drop in the ocean.

8 years, 5 months ago - Marlom Tander

@Chris Bogle Fair enough, but does the HMRC consider the festival circuit to be a theatrical release? IMO it would be brave to just decide that festivals counted.

That said, HMRC have respect for people who realise they are on uncertain ground and seek clarification.

Furthermore, if you ask, and they give you a written answer, and you follow their interpretation it's a perfect defense in the event of a later audit.

I note that IIRC no one has popped up to say, "we asked, they said Yes/No".

I'm not seeking the credit for shorts, but I'd strongly advise anyone who is, to get written confirmation that their intended distribution counted. If you get a Yes, you're protected even if the proper answer should have been no. If you get a No, then you know.

And finally, in the event of an audit, you do not want to be the person who didn't ask for a clarification that they could have reasonably been expected to ask for. Students or actors making a couple of shorts, they can probably plead that they shouldn't have been expected to ask. Someone making a lot of shorts, at a serious level, much harder to explain not asking.

8 years, 5 months ago - Chris Bogle

@Marlom Tander I suppose that's the rub - but I was at a festival in the Bay Area last week and people were paying full ticket prices to attend short film screenings at multiplex cinemas. That to me counts as a theatrical release, it also counts on imdb and crucially it counts to festivals and dribbers who will absolutely see a public cinema screening of a short film as a theatrical release. I don't know if HMRC think the same - I didn't claim the tax break on mine, but I probably will on my next one if my accountant gives me the all clear.

I think there's a lot of uppityness about short film, contrary to what people are saying they're not simply training-wheel films shot on iPhones. Yes they're used for learning the craft, but they also stand alone as a form.

@wozy it's a completely outdated notion to say that short are niche. There's a huge public audience for shorts, as is testified by the explosion of short film festivals around the world and online distributors. When I spend £10K+ on a short, it's not a million pound budget but I do directly employ people and contribute to the economy - in both the short term, and the long term with my (hopefully) success. No of course it's never going to make the same kind of revenue as a successful feature, but just because a business is small, it doesn't make it any less valid, especially when they are so fundamental to the UK industry - no director gets a break without a festival short on their reel. So why shouldn't directors take advantage of industry breaks, when most have to self fund their entry into that very industry?

Shorts are valuable financial and creative investments.

8 years, 5 months ago - Paddy Robinson-Griffin

Hi Chris, just thinking of your last statement there - do you have any examples of a short being a good financial investment? One that's turned a profit whilst paying everybody?

8 years, 5 months ago - Chris Bogle

@Paddy Robinson-Griffin as I'm sure you know financial investments can be long term and don't always pay instant dividends, in fact good ones rarely do. They're loss-leaders. There are also intangible dividends, the knock on effects of the collective experience, the credits, the festival exposure, the feature that gets funded because you've show what you can do on a short.

Every established director who has made their splash with a short film from the Andersons to Spielberg is a product of a sound financial investment in short film making. The value is there, it's just long term.

Personally, I wrote my last short off through my business, as a valuable training and marketing exercise that would provide me with a valuable product with which I could sell my services and obtain future funding. I had no problem making a business case for it.

8 years, 5 months ago - Chris Bogle

But no, a short film is never going to be a short term financial investment unless it wins at a major.

How are you by the way? :)

8 years, 5 months ago - Marlom Tander

You are confusing HMRC with the Koala Brothers. The HMRC is not here to help.

Not outside of very narrow remits. Which, in this case, has very little to do with a love of movies, and a lot to do with driving big money to shoot in the Uk so that there are paid jobs available in the UK.

Basic maths.

If a UK guy wants to make a short, and has 5K, they will spend 5k making a short. If you give them a tax break, they will spend 5K plus the break. But if that's British money, then that break came out of the NHS, Police, etc.

If Hollywood wants to make a movie, and has 200M, and you can bring that to the Uk for a break of say 40M then you have added 200M to the economy AND, since most of that ended up as salary or to smaller Uk businesses, you actually get back most of your 40M, so no net cost to gvt revenues. [Simplified for effect]

8 years, 5 months ago - Marlom Tander

We're getting off topic but the talent already trains itself on shorts, at it's own expense, and there is no shortage of good people available to hire by the commercial industry when it comes knocking.

So why should a Gvt - that can't fund the NHS properly - subsidise shorts when it can see that it doesn't have too?

Also, why should SP make the case? Surely, if you are fired up, you should take the lead :-)

8 years, 5 months ago - Lee 'Wozy' Warren

You shouldn't have to question why should you should not give a tax break on short film. If they did give the break then it should be in proportion to the audience that views it. The audience for shorts is not the general public like it is for features. It's other filmmakers and niche cinephiles. It's a much smaller percentage. Even on VOD or streaming. Shorts, like features, needs star power (actors, directors, and producers) to make great returns (whatever that is!?!?!) and you rarely get stars in shorts. Yes I worked on a short last year with a well known female actor from UK and US television, but it's not going to drive revenue - it'll drive the feature remake of it.

There is no market for shorts commercially. No matter how many times you stream it and make a few pennies. It's not sustainable. And that's one reason why it shouldn't be given tax breaks. The budgets for shorts are not big enough to make a difference. You'll have every Tom, Dick and Harry with an iPhone suddenly making films with their hand out for money from the treasury.

The other reason is that we make shorts to learn. To cut our teeth on. So that when we 'graduate' to making a feature, because the drive should always be up, we have some experience of the perils that lie ahead. No one in their right mind sets out to carve a career in shorts - unless they do it purely for fun.

Personally, I think any lobbying for tax breaks on shorts would be a waste of time - spend the effort making shorts to learn. Period! SP knows this. Producers and directors with experience of the business of film know this.

My 2c worth.