UK game devs start to claim 'culturally British' tax breaks

Developers across the UK are donning their Union Jack dresses and piling up on their tea stocks, now that they claim the long-campaigned for "culturally British" tax breaks. We jest of course, but as of this week, qualifying studios are able to claim up to 25 percent on 80 percent of their production costs, a huge change that trade association TIGA believes will lead to £188 million (around $312 million) in additional investment into the national games industry over the next five years.

The still bizarre fulcrum in all this is the Cultural Test itself, which was a sticking point for the European Commission who sees it as vital to the aid. As the EU Commission put it in March, "the proposed cultural test ensures that the aid supports only games with cultural content without leading to undue distortions of competition."

The test is designed to determine how culturally British a game is based on the level of cultural content, the "cultural contribution" of the studio making it, the studio's location, and the different nationalities of the project's key personnel. In other words, a London-based studio full of homegrown talent that's making a game about a deerstalker-clad detective who's investigating the great crimes of, er, London is likely to be quids in.

Tax breaks were pushed for following the UK games industry's decline in recent times. Once one of the top three worldwide producers of interactive entertainment, the UK fell behind with studios like Bizarre Creations, Eurocom, and Studio Liverpool shutting their doors in the last couple of years. Now the tax breaks are in place, it'll hopefully signal rosier times for the country's industry without anyone having to put on a Union Jack dress.
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This article was originally published on Joystiq.