The government has come under fire after it emerged that a record £60.9m of taxpayers' cash was handed to Disney last year to film the Ryan Reynolds superhero movie Deadpool & Wolverine in London – despite the studio making £3bn of operating profit in 2024.
It is understood to be the largest sum ever handed to a movie production company in a single year since the government introduced its incentives to attract film makers to the UK in 2007.
The blockbuster payment would cover the cost of 802 GPs for a year, 4,227 hip operations or 61 MRI scanners.
It has attracted the ire of campaigners as it was revealed in accounts just days before an unexpected rise in the government's energy price cap and ahead of the budget which is expected to introduce a string of tax hikes.
"It's extraordinary that at a time when the tax burden is squeezing ordinary families, ministers are handing tens of millions of pounds to one of the world’s most profitable corporations to make a superhero film," says John O'Connell, chief executive of the TaxPayers' Alliance.
"These subsidies should be scrapped or tightly capped. Taxpayers' money should be used to fix public services, not boost the balance sheets of global entertainment giants."
Dan Neidle of Tax Policy adds that "the current film tax credit rules are clearly important to the film industry, but it’s unclear to me whether they're value for money for the UK as a whole."
Remarkably, the government itself isn't even sure of this.
Studios filming in the UK get a cash reimbursement of up to 25.5% of the money they spend there with a total of £6.4bn paid out by HMRC since 2007.
However, despite dispensing staggering sums, the government admitted in filings in 2013 that the incentives are "not expected to have significant wider macroeconomic impacts."
They have however lifted the curtain on the highly secretive world of film finances. Budgets of movies are usually confidential as studios combine the cost of them in their overall expenses and don't itemise how much they spent on each one.
Movies made in the UK are exceptions and Deadpool & Wolverine was one of them as it was largely shot at Pinewood Studios. Nearby Pitstone Quarry doubled for the film's dystopian wasteland, The Void, while Burnham Beeches nature reserve in Buckinghamshire was the site of a memorable car battle between the two lead characters set to You're the One That I Want from Grease.
Part of the reimbursement involves studios setting up separate UK companies for each movie they make.
They file accounts which shine a spotlight on the film's finances. The Disney subsidiary behind Deadpool & Wolverine is called Richmond Street Productions in a nod to its cinematographer George Richmond.
Its latest accounts show that by 31 October 2024, three months after the movie was released, Disney had spent a staggering £418.1m on it putting it in the top ten most expensive films of all time.
The actors' and writers' strikes in 2023 heavily disrupted filming and the accounts reveal that the "final costs exceeded the production budget."
Disney banked a £21.1m tax credit in 2023 giving it a total reimbursement of £82m which brought its net spending on the movie to £336.1m.
This benefits local businesses such as security, equipment hire, transport and catering firms. Last year Disney announced that since 2019 it has spent £3.6bn on production in the UK across 41 shows and 29 feature films supporting more than 32,000 jobs.
Deadpool & Wolverine paid £9m to its staff who peaked at a monthly average of 105 people, not including freelancers, contractors and temporary workers.
The investment paid off as Deadpool & Wolverine grossed $1.3bn, bucking a downward trend for Disney driven by audience fatigue for its Marvel Cinematic Universe (MCU) of superhero movies.
The movie's magic formula was aiming at an adult audience as it was filled with innuendos, bloody violence and glib references to drugs.
This too has attracted criticism as although the movie is rated 18, Disney sells toys of the characters in it which also appear in its theme parks and cruise ships.
"Associating drug references, however obliquely, with humour and cool 'in jokes', unwittingly makes drug use seem exciting and attractive to younger viewers, who will undoubtedly become familiar with the references via social media, even if they are not old enough to watch the latest film themselves," says Sarah Brighton, chief executive of drug prevention and education charity Hope UK.
“The MCU creators, together with all parties who are involved in funding or supporting the film industry, have a responsibility to safeguard the wellbeing of young fans - children and young people who are going to be massively influenced by the movies and their movie stars."
