UK games tax relief investigation 'unreasonable'

UK games tax relief investigation 'unreasonable'
Craig Chapple

By Craig Chapple

April 23rd 2013 at 12:00PM

Industry 'cannot grow without this valuable lifeline', says tax specialist

The EU’s decision to delay and investigate UK games tax relief is unreasonable and extremely disappointing, a London-based tax specialist has said.

The European Commission recently announced it would be investigating whether the UK needed tax breaks, as there was “no obvious market failure” in the sector, and that games would be developed even without state aid.

Alma Consulting Group MD Martin Hook said however that tax relief was much needed in the UK, and highlighted a study by Games Investor Consulting which showed 41 per cent of all jobs lost in the game industry between 2009 and 2011 had relocated overseas to countries such as Canada and the US.

He added that the UK industry would not be able to grow without tax breaks, but was hopeful it would be approved given similar schemes implemented in France and in the high-end TV sector.

“Similar schemes have already been investigated and approved, along with the high-end television tax relief, that came into effect this month (April),” said Hook.

“France already has a similar initiative approved by the EC after a 12-month investigation – we are hopeful they will act as precedents to support the UK scheme, which is currently hanging in the balance.
 
“We ultimately believe this relief will be approved and urge the EU to introduce this relief as soon as possible, for the sake of the country’s video games industry, which cannot grow without this valuable lifeline.”

Yesterday UK game industry trade body Ukie made a plea to developers to band together in face of the European Commission’s investigation and continue to push for games tax relief.

The organisation’s CEO Jo Twist, in an article published on Develop, said that while the investigation was of serious concern, it was not an insurmountable barrier to overcome, calling on the industry to focus on providing a powerful and united answer to the Commission’s questions on the importance of games tax relief.

You can view Jo Twist’s full article on the matter here.