Britflicks: A Pain On The Economy And The Eye- Tax Avoidance Schemes Used By British Filmmakers

June 26th, 2012

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Marina Hyde wrote a great article for The Guardian on Friday.  As we’ve seen in the media, tax avoidance schemes and scandals are popping up everywhere.  Jimmy Carr’s explosive case exemplifies this upward trend of tax avoidance.  Hyde brings to light one particular way (of numerous ways) in which Brits are getting rich from skipping out on their tax bill: they make shoddy “Britflicks.”  Hyde writes,

Obviously, there are exceptions. But for every rare Britflick success, there must be 20 sensationally appalling duds. In a country so strong in all the other arts, it was one of the great mysteries of the modern cultural era. So what a lightbulb moment to read that, according to the Times, £150,000 invested in a film could generate £1m of tax relief – even if it flopped. The product is in effect irrelevant. Those British films that take three figures at the box office should clearly be trailed with the tagline: “From the accountants who brought you Love, Honour and the Rancid Potato Men”.

Forgive the detour into esoterica, but have you seen Mad Cows? For some years now, my friend Matthew and I have nurtured a demented fixation with this 1999 British classic, watching it countless times, typically in drink, whilst howling: “HOW? How in the name of sanity did this get made?” I now wonder if it could be that the ever-perplexing sequence in which Rustie Lee is effectively interned in HMP Scrubsway, for merely being in a shop at the same time Anna Friel shoves some frozen peas down her bra to ease her nursing discomfort, is not an inexcusable plot hole after all, but an extraordinary act of cinematic accountancy that, every time it is watched, triggers an automatic payment of a hundred grand into some investor’s bank account.

Continue reading here.

The world is still waiting for the next great drama involving an alienated businessman making a long, existentialism-influenced, post-modern journey of self discovery while bouncing from tax haven to tax haven, setting up shell companies and making lots of money. Until then, its hard to imagine tax avoidance being a net positive for the British film industry.

On a more serious note, although the British are plagued with low-grade cinema, the larger issue at stake is what matters.  Tax avoidance is a serious offense.  Governments rely on tax revenues for serving their people, and in the world’s current era, those revenues dwindle.  While the few wealthy citizens inflate their bank accounts by cutting out their tax payments, those beneath them economically are hurt significantly.  More sick people go untreated, infrastructure deteriorates, social programs get slashed and youth are deprived of education.  All of these can (and do) happen partly because tax dodgers don’t fulfill their civic duty of paying taxes.

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Written by Sam McWilliams

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