British tax authorities are reviewing Netflix’s UK accounts as the global SVOD giant begins to ramp up its presence in the country. This comes as The Crown broadcaster is reportedly in advanced talks to take major studio space at Pinewood Studios.
Netflix said that its UK accounts are currently under review by HM Revenue & Customs, the UK’s equivalent to the IRS. It disclosed this information to U.S. regulators and confirmed the news to The Times newspaper.
A Netflix spokesman told Deadline, “HMRC regularly audits the accounts of UK companies and we’re currently engaged with them on this standard review.”
“Netflix is contributing to the UK economy in many different ways. The provision of our service to UK-based subscribers results in significant amounts of VAT for the UK government: 20% of the price of every Netflix UK subscription. We are also investing hundreds of millions directly in the UK entertainment industry, with close to 40 projects underway this year including new seasons of The Crown and Black Mirror and co-productions with British broadcasters. More than 20,000 people are working directly on Netflix original productions in the UK, with this number set to grow as Netflix continues to invest in creating and licensing UK content,” the spokesman added.
This comes as the company is reportedly in advanced talks to take a long lease at Pinewood Studios, the famous studio complex that has housed the Star Wars and James Bond franchises, according to the Financial Times. Netflix has been aggressively ramping up the amount of business it does in the UK. While its main European headquarters are based in Amsterdam in the Netherlands, it has been staffing up its London office. The company has hired a number of top British execs to be based in the UK including former Sky drama chief Anne Mensah, as revealed by Deadline last month, former Channel 4 commissioner Lucy Leveugle, who will join its non-scripted team, and documentary chiefs Kate Townsend and former Canal Plus executive Diego Buñuel. It has also hired a number of senior PR executives from organizations including the BBC and Twitter.
It would be Netflix’s latest studio space; the SVOD company launched its first European production hub in Madrid earlier this year and inked a 10-year deal with the owner of Sunset Bronson Studios to lease the stages and offices at the venerable Hollywood venue.
In the summer, Netflix supported Pinewood’s expansion efforts. A Netflix exec, in August wrote, in support of Shepperton Studios planning application, “Netflix welcomes the proposed expansion of Shepperton Studios in the UK. We would make great use of new facilities for our original productions in the UK and recognize the valuable effects that film production can bring – including economic impact, sustained employment and skills development, and cultural benefits such as screen tourism and national branding. In 2018, Netflix plans to spend approximately $8B on content worldwide, across more than 700 television and film productions. We would like to be able to produce more in the UK, and at Shepperton in particular; however, we are limited by the lack of available space. Increasing the number of sound stages to meet current and projected demand will undoubtedly bring additional investment from our industry to the United Kingdom.”