EXCLUSIVE: Pinewood, Warner Bros Discovery (WBD), and Sky have sounded the alarm over a so-called UK film “studio tax” that they argue could torpedo Britain’s status as a rival to Hollywood.
The companies raised concerns about “extreme” business rate hikes for sound stage facilities, arguing that the UK’s competitiveness and the development of new studios could “collapse” unless the government takes action.
Their fears were voiced in written evidence to the Culture, Media and Sport Committee’s inquiry into the health of Britain’s high-end film and TV industry. Deadline has been following the business rates battle since February and the interventions from studios represents an escalation in tensions over the issue.
Sky, which has recently opened doors to Sky Studios Elstree alongside NBCUniversal, said the changes are a threat to the “profitability, and therefore viability, of studios throughout England and Wales.”
The Comcast-owned company explained: “If these new rates are actioned the building of new production studios and the expansion of existing ones will become financially unviable, causing knock-on impacts on large and small productions.”
It added: “There is extreme disparity between film studios business rate changes and all other industries, which has the potential to negatively impact a successful and globally competitive sector.”
Pinewood Studios, home to shoots including Deadpool 3, said business rates hikes will “likely reduce the level of new development.” WBD, which operates Warner Bros. Studios Leavesden, where Wonka was filmed, said it was a “key issue impacting the UK’s competitiveness.”
The British Film Commission, which has been coordinating industry lobbying against the price rises, said in its submission to Parliament’s Culture, Media and Sport Committee that the changes are “unwelcome.”
“The BFC is currently working with the studio sector, government and the Valuation Office Agency to address this issue with the aim of ensuring a mutually acceptable agreement is reached as soon as possible,” it said.
The business rates hikes follow the Valuation Office Agency updating UK studios’ “rateable values,” an assessment of the annual amount a property would rent for if it were available on the open market.
Rateable values are used to calculate business rates, a tax on non-domestic properties. The higher the rateable value, the higher the business rate tax.
Pinewood had its rateable value raised fourfold to £16.2M ($20.5M) on April 1. Warner Bros. Studios Leavesden saw its rateable value rocket fivefold to £25.3M.
A Valuation Office Agency spokesperson said: “A film studio’s new rateable value will reflect changes in rental values between 2015 and 2021. Since 2015, when the last revaluation was carried out, the growth in streaming services has led to an increase in rental values.
“We are working closely with representatives of the industry to assess whether there are grounds for any change to rateable values. Every effort is being made by all parties to resolve the situation as soon as possible.”