UK Government breaks silence on tax breaks

UK Government breaks silence on tax breaks
Michael French

By Michael French

December 20th 2007 at 10:00AM

"What works for the French may not work for the UK" says Department for Culture, Media and Sport

The Department for Culture, Media and Sport has told Develop that it plans to study the impact of last week's EC ruling granting tax breaks in France before it makes a call on whether similar measures should be implemented in the UK - and has warned that they may not be feasible in the country.

As we revealed last week, the European Commission announced its verdict on the legality of France's games tax rebate bill after a year of investigation, allowing the 20 per cent budget refunds provided games which benefitted from the subsidy had a cultural element.

Industry executives across Europe had been keenly awaiting the verdict as it would answer the question as to whether or not games industry subsidies would be against EU rules regarding State Aid. Now that the EC has allowed the French bill, it means other countries could follow suit.

However that doesn't necessarily mean the UK will get its own tax break for games, said a DCMS spokesperson: "We value our games industry greatly and want the UK to be a place where games companies want to be. However, what works for the French games industry, may not work for the UK."

Now, the DCMS will carefully examine how the French bill will impact the country's local industry and its wider influence on the rest of Europe, the DCMS added: "We will study the detail of the European ruling and consider what its impact will be for the French, UK and wider European games industries."

UK game developer trade association Tiga has already promised to begin lobbying the government to introduce its own games tax credits, like those previously available to film producers, and earlier today called on the country's publishers and developers to support the lobbying.