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UK Government Promises Tax Breaks For Games After 'Cultural Test'

UK Government Promises Tax Breaks For Games After 'Cultural Test'

March 24, 2010 | By Chris Remo

March 24, 2010 | By Chris Remo
More: Console/PC

In response to years of lobbying on the part of UK-based game industry groups, most notably TIGA, the UK government said today its 2010 budget will include tax breaks for video game developers.

"[The Department for Culture, Media and Sport] will be working closely with HM Treasury, BIS and the video games industry in the coming months to develop the system for tax relief that will bring the maximum benefit to the video games industry and the wider economy," the department said in a statement today, noting that the as yet undetermined tax breaks will likely be similar to existing motion picture tax breaks.

The announcement also indicated that the tax relief will be granted on "qualifying expenditure for productions that pass a Cultural Test," but did not give any guidelines for the nature of such a test.

"I will offer help to the computer games sector, similar to the steps which are helping restore the fortunes of the British film industry," said Chancellor of the Exchequer Alistair Darling during his budget address to Members of Parliament. "This is a highly successful and growing industry, with half its sales coming from exports, and we need to keep British talent in this country."

Today's confirmation of upcoming tax relief was welcomed heartily by TIGA, the entity which has argued most strenuously for the necessity of offering financial incentive to keep the United Kingdom viable for game development.

The move "is the decisive breakthrough that TIGA has campaigned for," said TIGA CEO Dr. Richard Wilson. "Ministers have made the right decision at the right time for the right industry. Government Ministers are to be warmly congratulated for their visionary decision. TIGA now looks to the Opposition parties to give their full support to Games Tax Relief in the Finance Bill."

Conservative MP Ed Vaizey, a Shadow Minister for Culture, has indicated his support for game development tax breaks, making opposition support for the Labour proposal relatively likely.

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