PKF have been involved with servicing clients who operate in the Film and Television Industry for over 10 years. Our advisory team assist film and television clients from the very beginning of their projects’ journey, all the way through until the conclusion of the project.
From our interactions with industry participants, whether that be formal meetings at our office in Surfers Paradise, or more casual engagements at industry events, we’ve observed that the missing link for many creatives is often lack of awareness about some of the excellent support and incentives which are made available at the local Council, State and Federal Government levels. This support often takes the form of Grants and lending facilities as well as Tax Offsets and Rebates.
Knowledge of what type of support or incentive is available, whether a project meets the relevant eligibility criteria, as well as how to go about accessing this support will assist a producer with building a robust finance plan for their project. Constructing a finance plan will assist a producer to determine the mix of funding for a project which may include Government and industry payments, as well as funds sourced from private institutions or investors and as a result identify any funding gaps.
Once the relevant support has been identified by a producer, and eligibility criteria satisfied, a producer will need to align their projects’ cash flow with their finance plan.
Consider the following example of how an advisor well versed in the film and television space can assist with constructing an effective finance plan for a Queensland project:
- $5,000,000 budgeted Qualifying Australian Production Expenditure (QAPE)
- Eligible for the 30% Producer Tax Offset
- $5,000,000 Funding Secured by way of:
- $100,000 grant funding from the State Government
- $1,500,000 Producer Tax Offset
- $3,400,000 private investor funding
On face value, the producer is pleased that the project is fully funded. Upon speaking with their advisor, the Producer learns the $1.5M that the project stands to receive by way of Producer Tax Offset, which the Producer wishes to use to fund cast and crew wages throughout the project, isn’t received until submission of the Income Tax Return at the cessation of the project. This has left the Producer with a cash flow ‘gap’ of $1.5M to be addressed.
Upon advice from their advisor, the Producer successfully applies to access $1.5M from the Revolving Film Finance Fund (or RFFF) (a Screen Queensland administered lending facility that is secured against the Producer Tax Offset). The producer uses the $1.5M from the RFFF to cover the cast and crew wages throughout the project, and upon cessation of the project and lodgement of the Income Tax Return, repays the monies accessed from the RFFF with the funds obtained from the QAPE Tax Offset which were received after submission of the Income Tax Return for the Project.
The Producers’ $1.5M cash flow ‘gap’ has been addressed.
PKF Gold Coast can assist all producers, whether they be small first timers who are creating their first project, or established industry veterans working on multi-million-dollar blockbusters.
Our advisors are excited to be supporting and attending the Gold Coast Film Festival, and look forward to seeing you there.
Written by PKF Gold Coast Senior Accountant Michael Cowan (pictured).