BFI, DCMS back return of film fund tax break
10 Jun 2019
The British Film Institute (BFI) is backing a so-called ‘new breed’ creative content Enterprise Investment Scheme (EIS) fund, which will offer investors the opportunity to put money into UK film and screen companies’ productions, to meet demand from streaming services
10 Jun 2019
Tax incentives on film schemes have had a chequered history, with a number of earlier schemes found to be vehicles for tax avoidance.
The new fund will be managed independently, but in association with the BFI , which says all investments will have received advance assurance from HMRC before any capital is engaged.
BFI says it chose partners Calculus Capital and Stargrove Pictures to manage the fund after a rigorous selection process. Calculus is growth company investor, which created the UK’s first approved EIS fund 20 years ago.
Stargrove’s principals have overseen over £1bn of investment, backing productions such as The Best Exotic Marigold Hotel, Suffragette, Call the Midwife, The Fall and Doc Martin. The team are looking to raise £20m in the fund’s first year alone.
The move follows last year’s BFI Commission for UK Independent Film, which set out to explore how to help UK companies diversifying across film and high-end television meet the growing demand for premium content fuelled by well-funded subscription streaming services, such as Netflix and Amazon.
One of its key recommendations was the establishment of an EIS fund to encourage a new wave of investors into the sector and deliver equity finance to help independent, UK screen content companies.
Amanda Nevill, CEO of the BFI said: ‘We are acutely aware of the need for investment so that film and other screen content companies can scale up. The BFI is excited about the opportunities this fund will present for a new wave of investors to get involved with our magical industry alongside Calculus and Stargrove, who have a wealth of experience and knowledge.’
John Glencross, CEO and co-founder of Calculus Capital, said: ‘This is a new breed of EIS fund in this sector. It will focus, not on project finance, but on building and growing companies involved in a broad variety of popular productions, across a range of platforms.
‘Throughout the fund’s development, Calculus, Stargrove and the BFI have worked to ensure our objectives and investment strategy are aligned with the true spirit of EIS legislation, which is how we’ve always operated.’
The fund is targeting £2 return for every £1 invested, over a target four to six-year investment horizon. This does not include the EIS tax benefits, which are in addition. It has a minimum investment of £10,000.
Margot James, digital and creative industries minister said: ‘The UK's creative industries are now worth more than £100bn to the UK economy and through our modern industrial strategy, government and the sector are working together to create further investment opportunities.
‘This new fund will give our exciting creative content companies the chance to grow and develop even more content that will resonate with viewers both in the UK and globally.’
An HMRC spokesperson told Accountancy Daily: 'Only companies pursuing long term growth and development are eligible under the Enterprise Investment Scheme and we are glad to be seeing a positive change in how film companies seek and use the investment.'