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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."
UK video game tax relief hinges on passing this 'cultural test'
The UK government outlined a "cultural test" that video games developed in the region must meet for the studio to qualify for tax relief, as part of the industry overhaul begun earlier this year. A game must earn 16 points to receive the tax break, with points awarded for such criteria as being "set in the United Kingdom or another EEA state," which includes all countries of the European Union, plus Iceland, Liechtenstein and Norway. The studio gets four points if the game stars two of three lead characters "from the United Kingdom or another EEA state or from an undetermined location," or it depicts "a British story."If at least half of the game's development is completed in the UK, studios can earn three points, while a "qualifying" project leader, script writer, composer, artist, programmer, designer and department head earn one point each. If at least half of the entire team qualifies as a legitimate UK operation, the studio gets another point. The tax code is like a game in itself.For example, if a studio in the UK (3 points) with all local staff (8 points) creates a game about a time-traveling doctor in a bowtie (4 points) as he journeys around Liverpool (4 points), Hufflepuff wins the House Cup. See? Easy.Peruse the entire cultural test below.
