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Tax relief will have no minimum budget

Draft legislation outlines tax relief and reveals details of cultural test

The treasury has today released its draft legislation which reveals more details about the proposed tax relief for the industry, including that all companies will be eligible for the relief, despite their budgets.

The scheme will also make allowances for post-release expenditure, for instance DLC and ongoing online games.

As well as these initiatives, the document revealed details of the cultural test developers will need to submit each project to in order to qualify.

The test awards points based on things like a game's setting, characters and the location any outsourced work, and a project must achieve 16 points to pass. For example, a game can score 4 points if "at least 75 per cent is set in the United Kingdom or another EEA state" and another point if at least 50 per cent of voice recording is done in the UK. How games with more abstract themes or settings, or those that lack dialogue, can make up for those missing points is not noted.

"It is vital that we properly scrutinise every detail of the legislation to make sure that the final scheme is in line with the needs of our industry"

Dr Jo Twist

The government expects around 300 companies in the UK to benefit from the legislation, although games made for advertising purposes or those with gambling connections will not qualify.

"We're pleased that an initial look at the draft legislation seems to be another positive step for our members and the wider industry, helping us to keep the UK as a leading creative force for games on the global stage," said UKIE CEO Dr Jo Twist.

"It is however vital that we properly scrutinise every detail of the legislation to make sure that the final scheme is in line with the needs of our industry. We need all games businesses to feed-back their thoughts over the next three months so that we can ensure that we have the best possible system operating for all UK games businesses."

UKIE is also calling on the UK industry to join its open sessions in January to discuss the bill ahead of the full consultation on the draft proposal.

TIGA, the UK's other industry trade body, also offered its advice to those hoping to take advantage of the scheme, with CEO Richard welcoming the legislation that his organisation worked so hard to bring about.

"One of TIGA's key priorities has been to ensure that the new Games Tax Relief supports the 'games as a service' business model."

Dr. Richard Wilson, CEO, TIGA.

"This is excellent news for the video games industry," offered Wilson. "The Government has listened to our proposals and adopted the vast majority of our suggestions for the design of Games Tax Relief. TIGA is particularly pleased that there is no minimum spend threshold: this will enable start-up studios and small development businesses with smaller budget games to benefit from Games Tax Relief.

"Additionally, it is excellent that the Government has agreed to allow post-release development expenditure including QA costs to be eligible for Games Tax Relief. One of TIGA's key priorities has been to ensure that the new Games Tax Relief supports the 'games as a service' business model. The Government agrees. This is a good day for the UK games industry."

"It's essential that these tax breaks will work for small start-ups like us too," added Alice Taylor of MakieLabs.

"It will give the UK the level playing field that we need: to be able to bootstrap, to grow, to attract in the right talent, and to build the sort of cutting-edge innovation-led companies that this country has always done so well to produce."

In his autumn statement last week, where he first outlined his plans for the tax relief, Chancellor George Osborne said "following consultation on their design, the government will ensure that the reliefs are among the most generous in the world."

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Rachel Weber

Senior Editor

Rachel Weber has been with GamesIndustry since 2011 and specialises in news-writing and investigative journalism. She has more than five years of consumer experience, having previously worked for Future Publishing in the UK.

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