Call for views on video game tax breaks

The government has kept to its word of reinforcing the UK as a creative centre by unveiling new tax breaks for video game production, in a move calculated to boost the economy and safeguard thousands of jobs.

Launching a consultation yesterday, the government said it wanted production companies and people working in video games, animation and high-end TV to feedback on the proposed options for the design of the breaks.

Intended to build on the success of the existing Film Tax Relief, which has led to £1bn in extra investment in British cinema, the breaks will be open for individuals and companies to comment on until September, with a view to draft legislation being published in the autumn.

Upon completion, they should allow the UK games industry to compete on a more level international playing field, while securing 4,660 jobs and £188m in investment over five years, said sector trade body TIGA, welcoming the consultation.

“Much of the UK and Scottish video games development sector is involved in tablet, mobile and online games development, said TIGA chief executive Dr Richard Wilson. “It is crucial that the new relief supports these developers and digital publishers, as well as the more the traditional console developers and publishers.”

It is also essential that a proposed cultural test – which games will need to pass to qualify for the relief – is backed and approved by both the government and the EU, added TIGA, and that it helps the UK’s developers and digital publishers.

For its part, the government said it would launch a separate consultation on the cultural test later in the year, once responses to the design of the tax reliefs,“among the most generous in the world,” have been taken into account.

“I want the UK to remain a world leader in the creative industries”, reflected George Osborne, the chancellor, speaking at the consultation’s launch.

“High-end TV, animation and video games production are exactly the kind of innovative, high-tech industries at which this country excels, and the government is determined to support them as part of our efforts to grow this economy.”

TIGA says it is vital that the tax breaks cater for games as a service business model (such as most Facebook and iPhone games), to allow studios to make annual claims on development of their continuous, evolving products, once the categories of costs that are allowable for relief have been determined.

 

19th June 2012

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