Members of Independent Producers Scotland (IPS) want to see VAT removed from cinema tickets sold in Scottish cinemas and the 20 per cent levied re-directed into a Film Production for Scotland fund.
The idea has been proposed by IPS, a body made up of film production companies set up last year to support and help raise additional money for the cash-strapped industry.
It claims the levy could generate £23.1 million and have a “transformative” effect on Scottish film-making, which relies on cash from the Scottish Government’s umbrella arts body Creative Scotland.
The group said: “We are confident the Scottish public would value the idea that they were supporting their indigenous film industry, at no additional cost.”
Both the French and Swedish film industries benefit from tax levies in one form or another. In the UK, for almost 30 years, the Eady Levy supported the British film industry. It was scrapped in 1985, after ministers said too much money was going directly to distributors over producers.
Belle Doyle, a member of the Association of Film & Television Practitioners Scotland, said a properly directed fund could bolster the production of commercial Scottish films not just support the creation of “cultural product”. She said: “At the moment, if you have a really commercial film it’s quite difficult to get money out of Creative Scotland as its funding is aimed at cultural projects, and you shouldn’t be giving people a financial incentive to film here. But if you had a pot of money and say ‘actually we can use it as an incentive fund’ that could work.”
However, the IPS’s proposal is also an expression of frustration by Scottish film-makers at the way Creative Scotland has handled their sector.
It said: “Scotland is the only country in Europe without a dedicated film agency. Many film producers think that Creative Scotland is a generalised arts body which is not appropriate for the needs of the film industry or its development.”
Sigma Films co-founder and IPS member Gillian Berrie said Creative Scotland was already “over-stretched and under-resourced”, and was left with “little choice but to be comparatively neglectful of a sector that needs constant nurturing and development.”
The producer, whose films include Hallam Foe and Young Adam, said film was “practically ignored” by the body and if nothing changed film-makers would have to leave Scotland.
However, any change in VAT charges on tickets would only be possible in an independent Scotland as EU legislation does not allow variation in levels within a single state.
It is also likely European legislation would make it very difficult to zero rate an item that already has VAT levied on it, though it may be possible to lower the amount significantly, to a ‘super-reduced’ rate such as the 3 per cent charged in Luxembourg.
The Scottish Government is said to be looking at how it could maximise and enhance benefits UK tax credits for Scottish production firms.
A spokeswoman said there is a discussion paper examining the options the Scottish Government could make available to the industry under independence.