Screen industry’s regional tax incentive should be renewed and rebooted

Some television series can’t die. They keep returning, year after year, until only a hard-core group of Stockholm syndrome sufferers are still watching, and no one, least of all the writers, can remember the point of it any more.

Other shows, by contrast, never seem to get a proper crack at it. They let off a few sparks, tease more to come, but before the breakthrough is secured the axe falls.

If the State’s regional uplift to the section 481 tax credit for the production of film, television and animation was a TV series, it would be in this latter category. It would be the kind of critically acclaimed programme that is killed off just as it is gaining traction, to the dismay of all involved.

The regional uplift is a financial incentive given to production companies that locate their projects outside the main Dublin/Wicklow hub and also — for State aid reasons — Cork.

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Moving out to the regions is more expensive because local crew availability often thins, racking up accommodation and other overnight costs. The tax credit uplift compensates for this, while also — in theory — creating the regular job and training opportunities that would eventually mitigate the need to move in crew from elsewhere in the first place.

But, as the Oireachtas Committee on Budgetary Oversight heard from Screen Ireland and others earlier this month, the incentive is in “its dying days”, and its lifespan has been too short for its main aim — the establishment of sustainable screen industry employment outside Dublin and Wicklow — to be achieved.

Although the main section 481 tax relief measure — a 32 per cent credit against corporation tax — was extended from the end of 2024 until the end of 2028 in Budget 2023, there was no extension offered to the regional booster. This, a succession of disappointed industry participants and representatives agree, is a shame. The regional uplift had, at its peak 5 per cent rate, lured projects away from Dublin and Wicklow to counties less exposed to the screen.

Aoife O’Sullivan of production company Subotica gave the example of two of her firm’s projects that received the uplift in 2021: the film Joyride, which was made in Kerry, and the television drama North Sea Connection, filmed in Connemara, which has just aired on RTÉ One.

“These projects would not have happened in the regions without the regional uplift,” O’Sullivan said. “We just wouldn’t have been able to afford to make them in Kerry and Galway.”

As the two projects were also set in those counties, somewhere else — closer to available crew — would have had to stand in for them.

“I wish it would come back,” Eoin Holohan, a film location manager and non-executive director of Screen Guilds of Ireland, told the committee. “And that’s not just me being selfish as a location manager who would prefer to work [outside Dublin and Wicklow] more often. I think that people in the regions who want a career in this industry actually deserve it.”

Section 481′s regional uplift was always designed to be short term. It was first introduced in 2019 at 5 per cent, with the intention that it would stay at that rate for two years, then taper off to 3 per cent for one year and 2 per cent for a final year.

After the Covid-19 production pause put the screen industry on ice for much of 2020, the uplift was extended at the higher rate for an extra year. But it dropped to 3 per cent in 2021, with just a 2 per cent uplift in operation in 2023, after which it is due to expire.

The heartening geographical spread of productions seen of late is now at risk of contracting. Indeed, film and television productions that might previously have ventured across the country are already sticking to more cost-effective pastures, the State’s development agency for the film, television and animation industry has reported.

“What we have seen this year in 2022 is a complete drop-off in productions making that decision to move out of Dublin/Wicklow,” said Teresa McGrane, deputy chief executive of Screen Ireland.

In its submission to the Oireachtas committee, Screen Ireland describes the process of building industry skills and careers outside Dublin/Wicklow as “a work in progress” and calls for the uplift to be extended until a full-scale review of the depth of the regional crew base can be undertaken.

The incentive, as conceived back in the Finance Act 2018, wasn’t perfect.

A requirement for trainees to live within 45km of the production office was “a little restrictive” for the highly technical animation industry, with trade association Animation Ireland asking for it to be replaced by a 75km rule instead.

The linking of the uplift to the State aid map had also become an issue, as that State aid map has now been updated and excludes parts of Limerick, making the application of the incentive “messy and chaotic”, according to McGrane, to the point where it is questionable how valuable it would still be even if it wasn’t tapering off.

But its main flaw, exacerbated by the pandemic, was its compressed running time. It was, as Screen Producers Ireland (SPI) chief executive Susan Kirby said, “too short”. Can an entire industry ecosystem be developed in five years with a tax credit that tapers off? “Probably not,” Kirby concluded.

Other schemes — such as the Western Region Audiovisual Production fund and various TG4-related funds — continue, as does the focus on regional development under Screen Ireland’s strategy for new national talent academies. But this only makes the withdrawal of the regional uplift before it can fully achieve its aspirations seem more counterintuitive.

New film studios, meanwhile, are poised to spring up across Ireland. Presumably, the business cases for them do not hang on a few percentage points of a tax credit here or here. The companies behind them will still argue for the uplift to be restored, of course.

So a reprieve — or a reboot, if you will — would not be a shocking twist. For now, however, the story of regional progress in Ireland’s film and television industry is a promising plot thread that has been left dangling, unresolved.