The British film industry produced some perky figures recently when it announced that production spending doubled to a staggering ￡1.17bn last year. But the triumphant film luwies can't rest on their laurels. A clampdown by the government on the industry's main source of income - tax relief - looks set to place more potholes in its path. The government believes that many investors have used tax breaks as an avoidance strategy. Last December,chancellor Gordon Brown announced thats48 of the Finance Act, which gives 100% tax write off to producers of British films, will cease to exist by summer 2005.The film world believes it will be replaced by a tax credit system. No-one would dispute that s48 has suffered several abuses since its inception back in 1997 when Labour came to power. Those that jumped on the bandwagon included independent financial advisers, which used Premiership footballers' money to invest in films using the tax initiatives, and TV producers who used it to make soap operas. The government put a stop to this by only allowing theatrical release films to qualify for s48. Further problems then arose when film industry investors found ways of exploiting the tax initiative by exiting the scheme after three to four years, therefore before the 15-yeaif loan period was up, with tax relief money in their pocket.
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