In an effort to avoid property tax bills that could potentially endanger the existence of certain filming facilities, UK film and television studios are bracing for inspections.
UK film and television studios are facing the risk of crippling property tax bills that could pose a threat to their survival. The threat has come from changes to the “rateable values,” which determine the amount a property would rent for if it were available on the open market, and are used to calculate business rates. The higher the rateable value, the higher the business rate. The UK’s Valuation Office Agency (VOA) has indicated that the increase in rental values since 2015, driven by the growth in streaming services and the attractiveness of producing in the UK, has led to the increase in the rateable values of studios. The VOA is engaging with industry representatives on the valuations, and is carrying out inspections of sites as it seeks to gather more information.
Pinewood Studios‘ rateable value is set to increase fourfold from £3.95M to £16.2M ($19.6M), while Warner Bros. Studios Leavesden will see its rateable value rocket fivefold to £25.3M. However, studio chiefs are perplexed by the huge increases, as they claim that the rateable values are not representative of the rental values. The VOA has based the increase on the revenue big studios generate from long-term leases, such as Disney‘s decade-long deal with Pinewood. Studio representatives have presented evidence showing that industrial spaces converted into sound stages are not being rented out at a higher price than they were prior to the refits.
The VOA has reportedly told studio reps that they will carry out inspections of sites, as most of their survey details are very historic. Talks are ongoing, with studios hoping to avoid crippling bills, which could raise existential questions about their future. Superna Sethi, Joint Managing Director of Twickenham Film Studios, said that this could be the death knell for a number of the UK‘s most historic independent film studios. The VOA is expected to publish its draft rating list in April. Studios in Scotland and Northern Ireland are not impacted by the changes.
