UK Govt to 'review' game development tax relief

UK Govt to 'review' game development tax relief

By Rob Crossley

June 16th 2009 at 4:16PM

Digital Britain: Lord Carter's report cites Canadian tax relief system [Update 2]

The UK Government will review proposals to strengthen the nation’s game development community with an extended tax relief system.

As outlined in Lord Carter’s Digital Britain report, the Government has pledged to “commit to work with the industry to collect and review the evidence for a tax relief [system],” which it deems would “promote the sustainable production for online or physical sale of culturally British video games.”

“Creative content is not restricted to the traditional analogue industries of the performing arts, film and broadcasting,” read the report. “Other countries such as Canada extend the model of cultural tax relief beyond the film industry to the interactive and online worlds.”

However, the paper added that such a review will “balance” any possible support it makes with “the need for fair competition” as well as “ensure value for money for taxpayers.”

Attempts by the Labour Government to keep up with the fast-growing worldwide game development sector was, at first, to slow its national rivals down.

Amid much ridicule from within the UK sector, in 2008 ‬the‭ ‬UK’s Department of Culture,‭ ‬Media and Sport had embarked on an investigation into the legality of‭ ‬Canada’s tax incentives for games studios.‭

The Government had tried to limit the tax incentives‭ ‬Canada enjoys, on the basis that they do not comply with‭ ‬World Trade Organization policy.‭ It was made clear back in February that these plans had failed.

Many had suggested that this was, in fact, a delaying tactic – an opportunity to wait before making a tough decision. The Government is now facing those same accusations for stating in the Digital Britain report that it will need more time.

Yet in a recent Commons debate, the newly reshuffled Culture Secretary Ben Bradshaw changed the tune a little, stating that “we are looking at introducing further tax breaks.”

The Digital Britain Report, which you can read for yourself here, did however reaffirm the UK game industry’s importance; a clear step up from the interim report.

“Electronic games and simulation also have a significant role in Britain’s digital content ecology and in our international competitiveness,” read the review, stating that games could “engage us and reflect our cultural particularism. They may in future have a cultural relevance to rival that of film.”