John Graydon Predicts UK to become Hub for Coproduction and Horror Films

In an upbeat keynote address to open the Film London Production Finance Market (PFM) today (October 8), John Graydon, senior partner at leading film and TV accountancy firm Saffery, predicted the new Independent Film Tax Credit (IFTC) will make the UK a hub for coproduction.

The Impact of IFTC on Coproductions

The IFTC is an enhanced expenditure credit of 53% that equates to approximately 40% in tax relief on eligible spend.

“You can already see the shift. That 40% is very attractive [to international partners]. My own perception is [coproductions] are going to come back in favour very quickly. In fact, I think they already are,” Graydon stated, citing the increasing number of projects already coming to him.

“It is the biggest news in the independent film community in my career and the time I have been working in the sector, which is nearly 30 years,” Graydon stated. “It is going to make a really big difference.”

UK as a Hub for Horror Films

Graydon also forecasted that the UK could become a major magnet for US and international horror pictures from companies like Blumhouse and Black Bear.

“I do think we might become the home of horror,” Graydon said. “The model of having a decent star and a relatively modest below-the-line spend keeps you well below the £15m [threshold] and getting 40% is quite compelling. I don’t feel that we will necessarily see more studio work but I think we will see more US indies come across [to make films in the UK].”

EIS and Potential for Reform

Graydon has also called for EIS [Enterprise Investment Financing] to be looked at again by the government. After a series of well-chronicled controversies, EIS can no longer be used for single film projects – but Graydon believes there’s a case to revise the criteria.

“EIS is a government-produced piece of legislation that is meant to encourage investment in risky businesses,” Graydon noted. “It was very popular in the 2010s. Then it was subject to a clampdown from government because they didn’t like the lack of risk.

“I like EIS in the sense that if you want to get investors to invest in film, there has to be something to encourage them to do that. It’s not the tax credit. That won’t encourage them to do that because that will form part of the finance plan. It has got to be something else,” Graydon said.

Conclusion

Despite widespread industry dismay at the recent British Screen Forum report on dismal recent trends in UK film financing, both Graydon and Chan claimed there is still investor appetite for UK indie films.

“My perception is that there are a lot of people who want to invest in film…[but] there needs to be a funnel, a place where you can go,” Graydon said.

“How do I see the future for independent film? I think it is going to get better. I think it’s going to remain hard… [but] I think it is going to improve. There has been a lot of talk about this new credit but it’s not really in yet and we haven’t felt the benefits of it. As more interest comes into the UK, and there’s more work available for our producers, both their own projects and other people’s, that starts to create a more sustainable business model,” he concluded.

FAQs

1. What is the new Independent Film Tax Credit?

The Independent Film Tax Credit is a new tax credit that allows eligible film productions to receive a 40% credit on eligible spend.

2. How will the IFTC impact coproductions?

Graydon predicts that the IFTC will make the UK a hub for coproductions, allowing international partners to benefit from the 40% credit.

3. Will the UK become a hub for horror films?

Yes, Graydon believes that the UK will become a major magnet for US and international horror pictures, thanks to the country’s favorable tax environment.

4. What is EIS, and why is Graydon calling for reform?

EIS is a government-produced piece of legislation that aims to encourage investment in risky businesses. Graydon believes that there is a case for revising the criteria for EIS to allow it to be used for single film projects again.