Tax Breaks Announced For UK Games Industry

The new budget introduces tax relief for UK game development studios for the first time, but it won't come into effect until 2013.

On Wednesday, the announcement of the annual budget included provisions to provide tax relief for UK game development studios for the very first time. The budget allows for £15 million in tax relief for the year 2013-14, with a further £35 million for 2014-15. Details regarding what form the tax breaks will take and how the tax relief system will be structured are still to be decided, and will be discussed in consultation with industry. The announcement is a U-turn on government opinion of two years ago, where the suggestion to introduce tax breaks for the games industry was described as €œpoorly targeted€. It comes at a critical time for UK games developers, which has seen nationwide studio closures and a continuing decline in the influence of UK-based studios on the global games industry. Over the last five years, the introduction of tax relief for games developers in France, Canada, and certain parts of the US has seen developers flocking from the UK to overseas studios following lay-offs, redundancies and mass studio closures. Figures from TIGA - the UK Games Industry trade association - show that the entire games developer workforce in Britain has fallen by 10% since 2008, and 41% of employees laid of by UK studios between 2009 and 2011 have relocated out of the country in search of new jobs overseas. The tax breaks come after two years of campaigning by TIGA and other advocates, both in government and in the UK games industry. Research by TIGA highlights the following benefits of the proposed tax relief system: 4,661 direct and indirect jobs generated and safeguarded £188 million increase in investment expenditure by studios £283 increase in the games development sector's contribution to UK gross domestic product £172 million generated in new and protected tax receipts to the HM Treasury Estimated to cost just £96 million over five years The proposed tax breaks will come into force in April 2013, pending approval by the EU. With GAME currently swinging in the wind, its fate uncertain after confirmation that they will be entering administration and culling their stock in the 'Spring Sale' asset dump, hopefully the announcement will not come as too little, too late.
 
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I'm a completist. I love platformers, indie games, bad horror movies and Joss Whedon. You can find me over on Twitter at @ejosully, where I talk about largely unrelated things.