EXCLUSIVE: The UK’s top film and TV studios are sounding the alarm to Culture Secretary Lucy Frazer about a property tax bombshell that is threatening Sunset Studios’ expansion into the British market. Frazer has been in talks with industry representatives to address the staggering increases in business rates. She is determined to protect Britain’s world-leading production facilities. While the final decision rests with Chancellor Jeremy Hunt, Frazer’s support could be crucial in pushing for a reconsideration. Hunt, a former Culture Secretary himself, has been a strong advocate for the UK’s creative industries.
Political interest in this issue has arisen as Sunset Studios Waltham Cross, a £700 million ($900 million) studio development in Hertfordshire, has been put on hold due to uncertainty surrounding property taxes. This expansion of Sunset’s California facility, which has hosted productions like the Oscar-winning film La La Land, is still planned by Blackstone and Hudson Pacific. However, they are waiting for greater clarity on the property tax concerns and the persistent inflation in the UK has also influenced their decision to pause construction. The start date for the project remains uncertain, with sources suggesting it could be delayed until 2024. Blackstone and Hudson Pacific have chosen not to comment on the matter.
In April, the UK’s Valuation Office Agency updated the “rateable values” of UK studios, which determine the annual rental value of a property if it were available on the open market. These rateable values are used to calculate business rates, and higher values result in higher taxes. Pinewood Studios, famous for being the filming location of James Bond movies, saw its rateable value quadruple to £16.2 million on April 1. Warner Bros Studios Leavesden, home to HBO’s House of the Dragon, experienced a fivefold increase in its rateable value to £25.3 million. Pinewood Studios and Netflix are among those lobbying against these changes, with support from the British Film Commission.
Industry insiders are concerned that higher property taxes will discourage investment in new facilities at a time when studio space is in high demand. One observer lamented that the Sunset Studios project has been affected by this issue, calling it “sad times.” Other developers, such as Giles Dobson from property consultancy Bidwells, have also expressed worries about rising property taxes jeopardizing the UK’s position as a global hub for the entertainment industry. The Valuation Office Agency is still assessing the situation and conducting inspections at UK studios, but it remains uncertain if a resolution will be reached. The VOA has been contacted for comment.
While the Treasury is providing £13.6 billion in business rate relief to companies in need of support, it has not confirmed whether UK studios are included in this relief. A Treasury spokesperson highlighted the UK’s status as Europe’s largest TV and film industry and emphasized the government’s commitment to supporting growth through tax credits and reliefs for production companies.
In other news, Hertsmere Borough Council, the owner of Elstree Studios, has warned that the facility requires up to £200 million in redevelopment funding due to the discovery of asbestos in sound stages. Elstree Studios is renowned for hosting productions like The Crown and Star Wars.
