Tax breaks coming to the UK videogames industry

Alistair Darling in his budget report has announced that tax relief is finally coming to the UK videogames industry.

The move means that those who make videogames in the UK will be given tax breaks. This is a bid to bring games design back to the UK, which has been dominated by countries such as Canada.

Helping gamers

In his speech Darling explained: "I will help the computer games sector… we need to keep British talent in this country."

He also noted that the tax breaks would be "similar to that of British film industry."

Currently, if you make a film under £20 million in the UK, you can get a cash rebate of 25 per cent back.

If it is over £20 million, then this is cut to around 20 per cent.

Recently, TIGA (The Industry Gaming Association) proposed that the videogames industry in the UK should be given tax breaks. This was backed by the Liberal Democrats.

Speaking at the time about the proposed tax relief, Dr Richard Wilson, Chief Executive Officer of TIGA, said: "Our latest research shows that out of a range of fiscal measures that could be introduced to help the UK games industry, the introduction of games tax relief is the most popular."

The idea of tax breaks was also announced in the Digital Britain report.

Stopping the rot

Tim Ingham, Editor of CVG, had this to say about the tax breaks: "This is fantastic news for the UK games industry. For too long, we have witnessed the closure of studios that could have had a fighting chance with Government funding, and the emigration of top talent from UK Studios abroad.

"This move will no doubt stop the rot - and keep our hugely successful games industry alive and kicking."

Ingham was a little hesitant about celebrating too soon, however, noting: "It would be wise for us to wait for the details before popping too many champagne corks. Our biggest rival for news games business, Quebec, offers a 37.5 per cent salary rebate to studios, as well as income tax holidays for UK staff that relocate.

"It's going to be hard for us to equal that. Even if the government matches what the UK film industry gets - a 20 per cent tax credit and over £50 million a year instate and Lottery funding - we'll still struggle to be as attractive a proposition to outside business as Canada.

"For now, however, it's just brilliant games have been recognised in this way. Hats off to industry body TIGA, who never gave up on lobbying to make this happen."

So good news all round for the UK games industry then. Well, bad news if you are a cider-drinking gamer as your pocket is about to be hit hard.