UKIE 'pretty confident' UK tax relief will go through despite EU doubts

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UKIE 'pretty confident' UK tax relief will go through despite EU doubts
UK gaming trade body UKIE is "pretty confident" the country's tax break proposal will be approved by the European Union and finally put into place, nullifying the doubts raised by the EU Commission over taxpayers contributing to the proposed relief.

Last year, the UK government approved the much-needed breaks for the country's ailing games sector, set to provide 25 percent tax relief on 80 percent of the budget for qualifying UK-made games. Then in April of this year, the European Commission put the proposal on hold by announcing an in-depth investigation, raising doubts over whether the relief was needed, and the potential for positive discrimination towards the UK and a resultant "subsidy race" between EU states.

Speaking to Joystiq, UKIE CEO Dr Jo Twist said her organization expects the proposal to be approved by the EU Commission despite those doubts, although there are apparent concerns over how long the process will take.

"I think we're pretty confident it'll go through," Dr Twist told us."We know that the [UK] government is 100 percent committed - across all parties, as well, there's 100 percent commitment to get this through. UKIE also approached other creative industries - so film, animation, and TV - and they wrote a letter of support to say 'we want the games industry to have tax credits just like we do now.'"

"We sort of weren't altogether surprised that [the European Commission] did this because the European Union is the European Union, and they have to go through these processes and ask the questions and make sure that they're asking the right questions," she added.

Greater concern may linger over how long the back-and-forth approval process will take; Dr Twist previously noted a similar investigation in France took a year to conclude. Earlier this month, UKIE published its full response to the investigation, outlining the "urgent" case for the tax credits' introduction.

The UK games industry, formerly one of the top three worldwide producers of interactive entertainment, has suffered significant decline in recent years, with big developers like Studio Liverpool, Eurocom, and Bizarre Creations forced to close their doors. Meanwhile, the country is still knee-deep in its recovery from recession.

"It's kind of an unknown quantity because it depends if the commission comes back with more questions," Dr Twist said of the potential for a protracted process. "And because you have this set number of days in which the responses have to be in by, it can kind of drag on. But hopefully it won't."

As for the Commission's questions, Dr Twist said they were centered around showing where the failure between supply and demand is for games made in the UK with a British or European identity.

"We think there is a market failure in people being able to make games and take the risk in making games that might be reflecting a European culture," Dr Twist said, "Because a lot of games are commissioned or greenlit or made to appeal to as wide an audience as possible, and particularly the huge markets in the past, which have been Asia and America. "

"The other thing is," she added, "They wanted us to show how where you made the game, actually your physical location and context in which you make the game, and the nationality of the people who make the game and their backgrounds, actually make a difference to the end product. Games, we said, are not made in a cultural vacuum. Every coder, programmer, artist, designer, director, everyone involved in making that product brings a little bit of themselves to that product. Identity matters in creating anything. So we really wanted to show the commission that it does matter that a game is made in the UK by UK residents, or is made in Europe, and has that European sensibility."

You can read UKIE's full response to the European Commission here.
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