Tax breaks used for ‘low-risk’ TV

TAX reliefs designed to encourage wealthy individuals to invest in high-growth business ventures are being used to back TV shows in a ‘low-risk’ investment scheme.

Financiers are using the breaks under the Enterprise Investment Scheme – intended for high-risk trading companies – to provide production funding to TV programmes.

Great Point Media, a boutique investment adviser, recently raised £40million for a TV show EIS fund. No investments are thought to have been made yet, but the scheme will aim to lend to programme makers who have already been commissioned to make a show but have yet to receive any payment.

Great Point said it would be investing in TV shows that have income ‘contractually agreed with a buyer equivalent to at least 75 per cent of the budgeted costs’. Because EIS reliefs allow investors to claim back 30 per cent of their investment as tax rebates, the scheme reduces risk for investors to virtually nothing.

Tax Efficient Review, an independent guide to investments like the Great Point scheme, said the structure was ‘a low-risk way in which to deploy surplus cash’.

The description is in sharp contrast to the Government’s stated aim of EIS tax breaks, which it says are ‘designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors’.

Great Point said that ‘investment is absolutely at risk as the prospect businesses are fully exposed to production risk and production failure’.

The company added: ‘There is no imperative under the EIS to take unnecessary risk.’