Clause 31
Finance (No. 2) Bill
4:45 pm
Theresa Villiers (Shadow Chief Secretary To the Treasury, Treasury; Chipping Barnet, Conservative)
No. I was just coming to that. TV companies cannot qualify for the tax break as their programmes are not intended for theatrical release, but, because of the way the legislation is structured, they come within the taxation framework that is being introduced. They are concerned about getting an additional compliance burden without any chance of getting a tax credit. That is why I am discussing the clause with particular reference to TV companies. I am not suggesting that we should extend the tax credit to cover them—that would be inappropriate—but we must mitigate the compliance burden that clause 31 would impose.
I have also tabled an amendment that we shall discuss later which would take TV companies that do not qualify for the tax break out of the overall taxation framework in the Bill. That would also deal with the problem.
I hope that the Economic Secretary will explain why he thinks it inappropriate to consider a series of short episodes to be a single film and a single trade for the purposes of taxation.
To conclude, clause 31(2)(c) deals with the connection that there needs to be between films in a series. Perhaps the Minister would like to expand on that. It seems that it could involve subjective judgments as to whether a series of films is sufficiently connected to qualify under paragraph (c). One example that springs to mind is the series of Harry Potter films. Would they be considered sufficiently connected to come within the paragraph? If we leave uncertainty and subjective judgments in the framework, they could lead to disputes about the level of the tax credit, which of course will drive up the cost of borrowing against it. That was one of the general points in my introduction. I look forward to the comments of members of the Committee and the Minister.