UKIE frustrated by missing tax relief

Rumours prove false as Budget fails to feature

Despite the rumours earlier this week, George Osborne's latest Budget did not feature any announcement of the games production tax credits.

"The ongoing delay to the UK games tax relief scheme has been very frustrating for UK developers," said UKIE CEO Jo Twist.

"Whilst there was not any announcement about the European Commission's decision in this year's budget, we continue to be confident that our case is strong and that we will receive word from the EC soon. We know that the Treasury and other UK government departments have worked hard to convince Europe of the case for UK Games Tax Relief, and we will continue to do everything we can to help push tax relief over the finishing line and get this vital scheme in place for UK developers as soon as possible".

In the Budget a small change was made regarding the proposed tax relief, but that relief still requires final European Commission approval before the UK industry can benefit.

"Corporation tax: video games tax relief and high-end television tax relief - The government will extend video games tax relief to goods and services provided from within the European Economic Area and apply a cap on subcontracting of £1 million per game, subject to state aid clearance. The legislation will also be clarified so that only those games and television programmes qualifying for relief will be treated as separate trades."

Twist went on to praise elements of the Budget that apply to UK business and could be of help to UK developers, such as £20 million over 2 years to support degree-level apprenticeships, and the three year extension on Enterprise Zone discounts on business rates and Enhanced Capital Allowances.

"Many of these new announcements are welcome steps which should help further cement the position of the UK as the best place in the world to make and sell games. Helping SMEs to grow more quickly is particularly crucial, and the announcements on SEIS and export support should have a good impact in this regard," continued Twist.

"However, it is Games Tax Relief which will have a real impact in unlocking our sector's cultural and economic potential, as the government recognised when introducing the scheme. It is vital that we get it in place as soon as possible".

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Latest comments (7)

Kevin Clark-Patterson Lecturer in Games Development, Lancaster and Morecambe College8 years ago
Hasn't this carrot been dangled for at least the last 4 years now? Or should I say this elephant in the room...

Maybe its not a carrot and the government is quietly thinking of all the money that GTA brings in to the coffers then why should they just let that go or at least wave goodbye to a massive chunk of it? Unfortunately for indies and the smaller than Rockstar studios, they wont get the break the UK industry needs as the Government are too busy going for the easy money.

Too much short term, not enough long term thinking.
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Gareth Wilson Design Director, SUMO Digital8 years ago
Its being held up by an EU investigation into subsidies for videogames in the whole of the EU, nothing to do with the UK government. The EU believe the industry is growing and doesn't need the subsidy (subsidies being against the EU's commitment to free trade between EU countries). Furthermore they're questioning videogames as being 'culturally relevant' when compared to tax breaks for TV and films being made in a country's native language for example, which get tax breaks to help a country retain its historical culture and language.

Much as I want this to happen I can kind of see their point. The problem is though that we're competing against countries like the US and Canada that have tax breaks in place so its not a level playing field.

Just to wind you all up the French somehow managed to get their tax breaks for videogames through a few years back and are still enjoying them today :-|
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Adam Campbell Product Manager, Azoomee8 years ago
This key thing for me in all of this is helping us to create a level playing field in the face of huge competition overseas. US and Canada are are good examples, but even closer to home i.e. Ireland and France just across the channel.

The UK government do want to see this incentive to benefit the UK industry's growth but its another thing we'll have to wait on the EU for and perhaps adding to the case (in the eyes of some) for the repatriation of certain powers.

Edited 1 times. Last edit by Adam Campbell on 19th March 2014 6:39pm

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Edward Buffery Head of LQA (UK), Testronic8 years ago
As one of the many English games industry peeps who moved to Quebec, if it does ever happen then the prospect of returning home from Canada will be ever so slightly more tempting. For now though, it just feels like this whole thing is a big tease. Ah well, c'est la vie!
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Martin Oliver Sound Designer and Music Composer/Director 8 years ago
What about bingo games? :) #torybingo
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Gareth Wilson Design Director, SUMO Digital8 years ago
@ John

Speaking to Chris Davies the North West MEP he says significant pressure is being applied. For me I imagine the hostile posturing towards the EU by the torys and UKIP isn't helping matters one bit. Particularly with the UKIP MEP's they don't even turn up half the time. Gotta win friends and influence people instead of sitting on the sidelines moaning.
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Andrew Animator 8 years ago
It's a shame the UK's ability to set it's own policies has been so heavily neutered by the EU. It's certainly another in a long list of reasons to change our relationship with it.
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