Is Hollywood Moving To London?

If it seems that more and more world premieres are taking place across the pond, they are. Some of the latest productions to open in London are Star Trek Into Darkness, Fast and Furious 6, Iron Man 3 and Les Mis just to name a few.

Big Hollywood studios are taking advantage of tax incentives that were put in place in the UK for this particular purpose. Those incentives make shooting in the UK cheaper than doing it in L.A. even though the cost of living is higher.

Over 1,000 people have made use of the tax breaks since they were implemented 5 years ago in an effort to revive the dying UK economy. The rebates have brought in approximately £800 million (about $1.2 billion) in revenues for the country.

Most major studios have embraced the opportunity and made London and other locations in the UK part of their films. Most recently the billion dollar Universal franchise Fast and Furious. For their sixth installment director Justin Lin was allowed to film car chases in London proper, something only done twice previously.

Disney recently announced that filming of their new Star Wars saga would take place in the UK. All of the previous six films of the franchise were at least partially shot in UK studios, but this announcement appears to imply that the bulk of the production will take place on English soil.

The US is trying to compete and avoid being left behind by movie studios. States such as New Mexico and North Carolina have had their tax incentives challenged by lawmakers. The UK has actually broadened their offers to include television productions, which has piqued the interest of HBO and others.

Producers worry that in the US the tax laws will change with no notice. The UK has been consistent and very willing to increase their incentives to attract more business.

According to the report in Yahoo! Movies L.A.is trying to keep up, and while they have their own tax breaks which amount to $100 million annually, it doesn’t amount to much when one blockbuster alone spends three or four times that amount.

The California Film Commission lottery was held earlier this week to determine who will receive the tax credits. It saw a jump of 18 percent in the number of applications. However, producers complain that it is too restrictive, for instance it excludes films with budgets over $75 million as well as new premium cable programs.

In stark contrast the UK welcomes these with open arms. London refunds 20 to 25 percent of the money spent in the country. They also include aspects of productions that are created in L.A. but used in the UK, such as costumes.

The UK also has incentives that reimburse the studios for how much it cost them to have any given star on their film. If a movie star gets a percentage of what the studio makes at the box office, the UK reimburses part of that money back to the studio.

This is a unique aspect of this incentive program and it is giving the British a clear advantage compared to other countries such as Germany and Canada, who also offer tax breaks.

The move is happening, even though London is more expensive to live in and has higher taxes. Production companies are making the switch from L.A. to London already with many special effects and post-production houses setting up shop across the pond.

As for the actors, many are willing to pay more money to live in London while being part of these big productions.

Some of the studios that have not followed this trend are being left behind and face serious financial peril. One such studio is Oscar winner Rhythm & Hues Studios, who has been forced to file for bankruptcy.

England also has incredible talent due to the vibrant and first class theater world from which most big screen actors come from. According to the CEO of a new special effects studio just opened, they don’t have to spend extra money housing and bring talent from abroad.

Hollywood has long been considered the movie capital of the world and while production decisions, such as casting and choosing which movies get a green light are still made at the studios in Hollywood, more and more productions are moving to England.

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