UK Chancellor Expands Enterprise Investment Scheme
Date posted: 23.03.2011
UK Chancellor George Osborne announced in his 2011 budget that the Enterprise Investment Scheme (EIS) will expand. The changes, which come into play in April 2012, giving a boost for UK production companies looking to raise private financing for films.
As of April next year the annual amount that companies will be eligible to receive through the scheme - which can be used by UK producers to raise private financing for films - will increase from £2m ($3.2m) to £10m ($16m).
The amount an individual will be able to invest will also be increased from £500,000 ($812,000) to £1m ($1.6m). While the size of a company eligible for EIS investment will increase from those with 50 employees and assets of £7m ($11.4m) to those with 250 employees and assets of £15m ($24m).
Also beginning in April, the income tax relief an individual can claim on EIS investments will rise from 20% to 30%, creating a more attractive proposition to private investors.
Robert Paul, of London accountancy firm Nyman Libson Paul (NLP) which specialises in EIS investments for films, said, "Films are based on investment and the better the encouragement to invest, the more likelihood that films will be able to get their funding and that they will actually get made. This is going to greatly incentivise private individuals to put money into films."
With the implementation of the increased budget, smaller firms can look forward to more feasibly financing independent films in need of getting off the ground.
In addition to the changes, the government launched its UK Plan for Growth which features a new Creative Industries Board. Its aims will be to encourage investment and explore issues regarding creative exports, skills, IP, and infrastructure. Members of the board will include representatives from the BBC, BSkyB, Pact, and Warner Bros.