The European Commission has finally approved tax relief measures for games developers in the UK. The move follows a six year long campaign by the British gaming industry. The plans granting the policy are said to be in line with EU state aid rules and games developers will be able to claim discounts on a game's production costs of up to 25 per cent, as long as they meet certain cultural requirements.
The campaign for the tax relief program began back in 2008 and was originally due to be approved last year. However the implementation was delayed by an investigation by the EC who were not convinced that the UK's games makers needed help at the time.
"Our initial doubts have been dispelled," said Joaquin Almunia, Commission Vice-President in charge of competition policy. "The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing."
More of this kind of thing?
£188 million investment boost
According to TIGA, the trade association representing the UK video games industry, the UK games industry is currently the largest in Europe, contributing around £1 billion to the economy each year. It also predicted that the tax break could bring £188 million investment boost to the industry over the next five years and will help safeguard more than 4,600 jobs.
"Tax breaks for games production will help the UK fight its way back to the forefront of video game development," said Dr Richard Wilson, head of TIGA, in a report on the BBC News.
Oh look, there's Tower Bridge
Cultural test
Interestingly a 'cultural test' will be carried out on game development projects, involving questions such as whether a game is set in the UK, whether the production team and staff reside in the UK and how many of the in-game characters are from the UK. The validity of the claim for the 25 per cent tax break will be based upon the results of the test.
Should we expect to see games such as; Morris men racing around Stonehenge in red double-decker busses?
