The government is to launch a consultation on whether to offer tax breaks to the local newspaper industry - but only for titles in England.
“Local newspapers are a vital part of community life – but they’ve had a tough time in recent years – so today we announce a consultation on how we can provide them with tax support too,” said the chancellor, George Osborne, delivering the budget on Wednesday.
Osborne said that, despite the shift to digital, local newspapers remain an important source of information for local communities and are a “vital part of a healthy democracy”.
The consultation, which will consider relief on business rates for local newspapers in England, aims to support publishers as they “adapt to new technology and changing circumstances”.
The consultation will not apply to titles based in Wales and Scotland because powers relating to business rate breaks are devolved.
There are 160 local newspapers in Scotland, and almost 60 in Wales, that are officially audited by the Audit Bureau of Circulations. There may be more that do not pay to have their circulation officially audited.
There are about 1,000 local newspapers published across England that pay to be audited.
“We are delighted the chancellor has recognised the crucial role local newspapers play in communities across the country,” said Ashley Highfield, chief executive of regional newspaper publisher Johnston Press. “The consultation on business rates relief is an important recognition of one of the challenges facing the industry.”
Osborne also outlined a range of measures to support the creative sector and the media, some of which were already announced in his autumn statement, including expanding high-end drama and film tax credits and introducing a new children’s TV tax relief.
“Our creative industries are already a huge contributor to the British economy,” he said. “Today we make our TV and film tax credits more generous, expand our support for the video games industry and we launch our new tax credit for orchestras.”
The government is to sweeten the tax break for high-end dramas, the so-called “Downton Abbey tax”, by reducing the minimum UK expenditure requirement on shows from 25% to 10%.
The rate of tax relief on films will be raised to 25% on the spend on movie productions that qualify for the break.
Children’s TV tax relief – 25% on qualifying production spend – will from April be extended beyond animation and live-action programming to include gameshows or competitions.
The change to make children’s gameshows or competitions eligible for the new breaks means that programmes such as CBBC’s Ludus or Sam and Mark’s Sports Showdown could now benefit from them.
A 25% tax relief for orchestras will be introduced in April next year.
John McVay, chief executive of producers’ trade body Pact, said that Osborne had “really got” the importance of the UK creative industries and the value of tax breaks, and that the introduction of the tax break for children’s TV was “obviously fantastic”.
He also said the restructure of the TV and film tax break “will be very, very helpful to attracting and sustaining growth in the UK”.
The government has also pledged to introduce a new £4m fund, known as the video games prototype fund, over the next four years which is designed to aid “access to finance and business support, and to target games development talent”.
Osborne also said that the government is committed to ensuring the rollout of superfast broadband as standard across the UK, as well as other initiatives including providing funding for Wi-Fi in public libraries.
“We’re committing to a new national ambition to bring ultrafast broadband of at least 100 megabits per second to nearly all homes in the country, so Britain is out in front,” said Osborne.
He also said that the 25% diverted profits tax to clamp down on multinationals that move profits overseas – dubbed the “Google tax” – will come into effect from 1 April.
“Let the message go out: this country’s tolerance for those who will not pay their fair share of taxes has come to an end,” he said.