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UK Gov't Claims 190m In Savings From Scrapped Game Dev Tax Break

UK Gov't Claims 190m In Savings From Scrapped Game Dev Tax Break

June 25, 2010 | By Leigh Alexander

June 25, 2010 | By Leigh Alexander
More: Console/PC

A UK budget with no tax breaks for game developers disappointed the region's industry after months of promises -- but the government says major savings are at stake.

According to CVG Online, the government claims that pulling the tax breaks from the budget saves the country 190 million ($283.54 million) during a time of economic stress. The new budget also raises the value-added tax to 20 percent, makes cuts to National Insurance, and reduces the corporations tax.

But the opposing Labour party -- which, like the Conservatives, had stated a commitment to game developer tax breaks earlier this year -- questioned the figure's accuracy and asked for an accounting verification. The report suggests the number comes from a "repurposing" of data from TIGA, the trade body representing the UK game industry and a vocal lobbyist on its behalf.

"Why are so many of the video games industry workforce leaving the UK at a time when global video game sales grew by 24 percent between 2007-09?" said Labour Minister Luciana Berger.

An as-yet-unverified report yesterday in UK trade paper Develop suggested that the government scrapped the tax breaks under pressure from "one of the biggest game companies in the world", but the report declined to name the alleged publisher.

Today, however, director general Michael Rawlinson of the UK's Entertainment and Leisure Software Publishers Association told that such an accusation is "totally left of field", and that it "isn't realistic" for one company to be able to stop the process.

"I think it was a cynical move by a government that wouldn't have had to deal with the consequences following the election," said Rawlinson, commenting on the culled breaks.

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