Nervous wait for UK games tax breaks continues

Nervous wait for UK games tax breaks continues
Craig Chapple

By Craig Chapple

March 19th 2014 at 2:40PM

But new addition to incentives could suggest positive negotiations with European Commission

Confusion still remains on the future of games tax breaks after a no-show during today's Budget.

While film and theatre tax credits were announced by Chancellor George Osborne, the status of video games tax breaks did not receive a mention during his Budget speech.

The subsequent report appears to suggest the government is still awaiting approval from the European Commission.

It states there will be an extension of 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".

It adds that such changes are subject to state aid clearance. Such changes however could be positioning the UK toward EC approval and suggests discussions are ongoing.

It had been suggested earlier in the week that an announcement on tax breaks approval was set to be made during the Budget or at some during the coming days. The UK minister for Culture, Communications and the Creative Industries Ed Vaizey also recently claimed an announcement on the matter was imminent.

UK games tax relief was first announced during the 2012 Budget by George Osborne. It been expected to go through on April 1st 2013 but was blocked by the European Commission which questioned whether there was a real market failure in the UK.

Jo Twist, CEO of industry trade body UKIE, said while the delay is frustrating, it would continue to champion tax relief for the UK.

“The ongoing delay to the UK games tax relief scheme has been very frustrating for UK developers," said 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”.