tax breaks for animation studios

a while ago aardman studios said that they may have to leave the uk and go abroad because tax in the uk was slowly breaking the studio.

They plus Animation UK (a lobby goup) have successfully got what they wanted today as the Budget gave them tax breaks…

This is good news also for gaming studios, and also TV companies in the whole… as now they can afford to make creative media here in the uk and not have to go abroad…

Link to bbc news story

Your thoughts please

Sounds like a good move to make. I recently worked for a client in the UK, and the tax system there is whack to say the least.

I don’t think tax breaks for animation studios is a great idea. They should probably try to resolve their entire tax system rather than give breaks to small groups.

it doesnt just cover animation studio’s small or otherwise, as aardman was the ones that called for it because they was on the verge of leaving uk to set up abroad. and aardman isnt a small studio its one of the biggest outside of usa.

it covers game studios, and even large tv production companies that use animation etc etc.

I live in Sweden where we have the highest taxes in the world and also an insane bureaucracy around absolutely everything. It’s just one of those things you gotta accept. Modern countrys just aren’t easy or cheap to live in. ;D

Tax environments are all relative. The recent campaign in the UK highlights this. UK might have had a perfectly fine tax situation for animation a decade or so ago, but since then places like Canada and Australia have introduced some major tax incentives to attract production companies to their shores, and the UK companies were finding it hard to compete.

More and more animation/VFX companies are setting up studios in more favourable tax environments, with Vancouver now hosting some of the biggest companies, Dreamworks setting up in Bangalore, Digital Domain setting up in Sydney (is that still happening?), ILM and Double Negative in Singapore, etc…

I wonder if all these tax incentives are a good thing, whether it will just end up being a global battle of the tax cuts.

Although I am not familiar with corporate taxation in the UK, I would guess the taxes probably weren’t harming the animation studio in any particular way (any more than other companies)- since they are a large company, they can threaten the government with leaving, since politicians hate to be held responsible for “destroying” more than a few jobs at a time. Companies do this all the time to extort special deals from the government at the expense of everyone else.

For example, here in Illinois, Sears threatened to move their HQ to Texas or something, because they wanted to not pay taxes. I heard they had done this before, and then not even bothered to cash in their tax incentives. They got their deal because so many people work at the Sears HQ here. It’s not a good thing, it’s asshole companies throwing their weight around and getting special treatment, essentially taking money out of everyone else’s pockets in the process.

FWIW, It wasn’t just Aardman in this campaign. Several of the major UK animation companies were talking about moving or shutting down.

Kemmier: If you ran a company that was bidding for jobs against other companies that were undercutting you because they were getting some major tax breaks, wouldn’t you at least consider moving to a more favourable tax environment?