U.K. Streaming Tax? Netflix Responds: “Incentivize Rather Than Penalize Investment and Success”

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Major international streaming platforms made their stance clear on Thursday when they responded to the proposal from a U.K. parliamentary committee suggesting a 5% levy on U.K. subscriber income for foreign streaming services such as Netflix, Amazon, Apple TV+, and Disney+ to support British drama creation. This is one way of expressing it in simpler, more natural language.

Netflix emphasized that the U.K. is their largest production center outside of North America, and they aim to keep it in this position. Implied within their statement was a cautionary note about potential taxes or fees: “In a rapidly evolving global market, it’s crucial to establish a business climate that encourages investment rather than imposing penalties. Taxes can reduce competitiveness and pass on increased costs to the viewers.

Over the past two years, Netflix has poured billions into the U.K., collaborating with over 200 production companies and employing around 30,000 actors, directors, and other staff nationwide, as per their own reports.

A source close to the matter stated that Netflix users have already paid the BBC license fee. Imposing an additional levy on them would be like taxing them twice and it’s just unfair. This is essentially a tax on success, and it means that Netflix members will be penalized. Ministers have previously rejected the concept of a streaming levy. The proposal for a Cultural Fund raises more questions than it answers. It also leads one to wonder: Why should people who opt for a paid service be forced to subsidize another service they’ve already paid for via the license fee? Additionally, who gets to decide what qualifies as ‘British,’ which organizations would receive funding, how would the fund determine audience preferences, who would allocate funding, and how would the funds be used? These suggestions could potentially set back the U.K. creative sector.

The Commercial Broadcasters and On-Demand Services Association (COBA) further contended that the proposed levy might adversely affect streaming companies’ investments in Britain. As Adam Minns, COBA’s executive director, stated, “In this current economic situation, a levy could potentially harm budgets for U.K. shows, jobs, and growth, while also increasing business costs.” Moreover, he suggested that the levy might unintentionally undermine public service broadcaster dramas by lowering co-production budgets at streaming platforms.

After conducting a series of hearings, the Culture, Media, and Sport Committee of the U.K.’s Parliament has suggested immediate measures to safeguard uniquely British content. This conclusion was reached following their investigation.

In a concluding report released on Thursday, it urged the Labour Party’s government, led by Prime Minister Keir Starmer, to intensify aid in the realms of film and premium TV productions. Some of its suggestions include offering extra fiscal incentives for independent films, bolstering support for autonomous cinemas, and advocating for a streaming tax.

The suggestion is for streaming platforms like Netflix, Amazon, Apple TV+, and Disney+ – who gain from British creativity – to actually invest in their words. This means allocating 5% of their UK subscriber earnings towards a cultural fund. This fund would aid in financing dramas that appeal to British audiences. If the industry doesn’t create this fund within a year, the UK government should impose a mandatory tax or levy, as recommended by the committee. The administration of this fund is proposed to be handled by the BFI (British Film Institute).

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2025-04-10 12:24