High-risk venture: tax breaks which financed James Bond are coming under fire
Film investment schemes that have helped finance a string of hits, including the James Bond movie Skyfall, are under threat from a government review of business funding.
Curbs to the Enterprise Investment Scheme (EIS) â€” where investors are given tax breaks for backing high-risk ventures â€” are likely to include restrictions on investing in media production companies, according to sources who have consulted with the Treasury on the review.
The EIS was set up to stimulate funding for fast-growing companies, but has been criticised for allowing rich investors to avoid paying tax without taking risks.
The Treasury is known to have taken issue with â€œcapital preservationâ€ schemes, where the risk is reduced by backing companies with high-value assets or proven track records. They include pubs, restaurants and established production companies.
The deliberations are part of the governmentâ€™s review of â€œpatient capitalâ€ â€” or long-term finance for promising British companies â€” which came to the end of its consultation period with industry last month.
Film and television have been a significant part of EIS investments â€” an industry worth an estimated Â£650m a year. However, some schemes have been criticised. Ingenious, an investment vehicle that counted David Beckham and Jeremy Paxman among its clients, has been accused by HM Revenue & Customs of being a tax-avoidance scheme. Ingenuous is appealing against a court ruling in the summer that it would have to repay a Â£700m tax bill.