The Chancellor is considering tax breaks worth tens of millions of pounds to encourage British television production companies to film big-budget programmes in the UK. The 25 per cent cut is expected to be announced in Wednesday's Budget.
The move follows a lobbying campaign by British television studios, which are increasingly filming overseas to take advantage of lower tax rates offered elsewhere. Ireland offers tax relief on 28 per cent of production costs while Hungary and France offer 20 per cent.
Although the hugely popular Downton Abbey, created by the Conservative peer Julian Fellowes, was shot in the UK many other big-name productions were shot abroad. ITV's Titanic, also written by Fellowes, was produced in Canada and Hungary, while the BBC/HBO adaptation of Parade's End by Sir Tom Stoppard was filmed in Belgium. Sky 1's Strike Back was made in South Africa and BBC dramas Camelot and The Tudors were both filmed in the Irish Republic.
The Treasury fears that without incentives the UK will lose ground to countries with lower production costs. However, the tax break will only be offered to help "cinematic television dramas", defined as those which cost at least £1m an hour to film, and is to be based on the film tax relief which saved Britain's £4bn film industry £100m in 2009.
British TV is second to none but unfortunately, time and time again, great British programmes are being made overseas where the tax climate is more favourable. If the budget can address this, it would be a fantastic move forward for our industry and the country as a whole, as a host of new productions would undoubtedly be produced here. As they certainly should be."
Britain is the world's second largest exporter of drama series and international sales of British television programmes generated an estimated £1.42bn in 2010.