Chancellor Gordon Brown has received a warm welcome from the indsutry as he promises new tax credits.
Following the unveiling of a new tax model last year for Section 48 - the relief used for low-budget films - the Treasury confirmed that Section 42 - relief for large-budget films - will also be reviewed and that a similar tax model will be proposed to replace it.
It was also announced that Section 48 relief will be extended until at least the end of March 2006, giving more time for formal consultation with the industry on proposed replacement legislation.
Director of the Metropolitan Film School in London Luke Montagu said: "These have been a nerve-racking few months for filmmakers, but today's announcement will come as a relief to the industry."
"We are very pleased that the Government appears to be working to create a new system of tax relief that will benefit filmmakers and the industry alike.
"We particularly welcome the extension of Section 48, which is so vital for filmmakers working on lower budget films, and the opportunity for filmmakers to feedback on proposed replacement legislation.
"Of course, in order to build a sustainable British film industry it is important for there to be a sustainable system of investing in it - and attractive incentives for doing so.
"We hope that the replacement legislation will support the wealth of talented filmmakers in this country, and enable Britain to strengthen its position as a key player in the international filmmaking arena."
