UK Film Studios Brace For Inspections As They Bid To Ward Off Crippling Property Tax Bills

EXCLUSIVE: UK film and television studios are preparing for inspections as they attempt to ward off property tax bills that could threaten the survival of some filming facilities.

Representatives for historic studios including Pinewood Studios and Ealing Studios sat down last week with a government agency as they build a case against tax hikes, which they argue could stymie Britain’s thriving production industry.

Deadline has seen a briefing note from the meeting with Valuation Office Agency (VOA) officials, in which studio representatives described the encounter as “helpful,” but said “outstanding issues” remain.

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The VOA told studio reps that they will carry out inspections of sites as the agency seeks to gather more information on “rateable values,” an assessment of the amount a property would rent for if it were available on the open market.

Rateable values are used to calculate business rates, a tax on non-domestic properties. The higher the rateable value, the higher the business rate.

Pinewood Studios’ rateable value will increase fourfold from £3.95M to £16.2M ($19.6M) under draft valuations set to come into force in April. Warner Bros. Studios Leavesden will see its rateable value rocket fivefold to £25.3M.

“The VOA indicated that they had initially ascertained much of the details of studios from websites, and following the publication of the draft rating list are now undertaking inspections as quickly as possible, as most of their survey details are very historic,” the briefing note said.

Studios chiefs are perplexed by how the VOA has calculated the huge increases in rateable values. There is speculation that it was based on the revenue big studios are generating from long-term leases, such as Disney’s decade-long deal with Pinewood. Many argue this is not representative, however.

During last week’s meeting, the VOA said it had “three pieces of rental evidence” to support its calculations but would not share what these were, according to the memo. Studio reps presented evidence showing that industrial spaces converted into sound stages were not being rented out at a higher price than they were prior to the refits.

Talks will come to a head before April when the VOA’s draft rates come into force. Studios are hoping to avoid crippling bills, which some said could raise existential questions about their future.

Superna Sethi, Joint Managing Director of Twickenham Film Studios, where Bohemian Rhapsody was filmed, said: “The VOA has thrown a grenade at the film industry. We would go as far as to say that this could be the death knell for a number of the UK’s most historic independent film studios.”

A VOA spokeswoman said: “A film or TV studio’s new rateable value will reflect changes in rental values from 2015 to 2021. Since 2015, the growth in streaming services and attractiveness of producing in the UK has led to an increase in rental values. We are engaging with industry representatives on the valuations.”

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