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European Commission approves UK games tax breaks
The European Commission announced it's approved the UK's long-sought gaming tax breaks, paving the way for the government to start finally implementing relief for game makers in the country. Almost a year after raising doubts over the necessity of the relief, the EU executive body concluded its investigation and gave the measure the go-ahead. "Out initial doubts have been dispelled," said Commission VP in charge of competition policy Joaquin Almunia. "The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing." The news means the UK government can begin providing tax relief on games that pass the proposed culture test, which assesses the Britishness of a game and its development. It may sound bizarre but the test was a sticking point for the EU Commission which was satisfied that "only around 25 percent of UK-produced games would be eligible for aid." UK gaming trade body UKIE says the breaks come into effect starting April 1, confirming that as originally proposed, developers of qualifying games can claim 25 percent relief on 80 percent of expenditure. "This is a great boost for the UK games industry, and excellent news for jobs and growth," said UKIE's Ian Livingstone. "There is no doubting the cultural, social and economic importance of games, the fastest-growing entertainment industry in the world. The new production tax credit will help UK games development talent to create even more world class, culturally British content for global audiences to enjoy. This support will undoubtedly result in a greater contribution from the games industry to the UK's digital economy." [Image: Sony Computer Entertainment]
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.
UK games industry still waiting on promised tax breaks
UK games industry trade association TIGA has urged the European Commission to deliver promised tax relief for local game developers after failing to meet a proposed implementation date. The UK government planned to issue a total of £50 million in tax breaks for UK developers, starting in April of this year and extending through 2015. The proposed Games Tax Relief (GTR) plan offered 25 percent tax relief on 80 percent of a qualifying game's budget, and required passing a "cultural test" for consideration. In April, the European Commission launched an investigation regarding the plan's necessity, delaying its implementation.
UK Interactive Entertainment CEO defends games as culture before EU tax investigation
Last week the European Commission announced it would kick off an "in-depth investigation" into proposed UK tax relief for video game developers, and UK Interactive Entertainment's Jo Twist wasn't too pleased by the news. This week the non-profit's CEO calls on the UK games industry to send a clear message to the European Commission, that games are culturally and economically relevant."[Games] generate culture, and are purveyors of culture in their own right," Twist writes. "They generate emotion and opinions, and the way they do that is through story, through experiences, and a huge diversity of innovative mechanics ... We have to show why there are not as many culturally British games being made as there could be and how the credit would help address this."The UK games tax relief plan calls on developers to pass a "cultural test" before receiving financial aid, incentivizing games starring British lead characters, in British locations or made by a local British team. The EU Commission worries the tax relief could negatively impact competition."The market for developing video games is dynamic and commercially promising," said EU Commission VP of Competition Policy Joaquin Almunia. "It is not clear whether the taxpayer should be subsidizing this activity. Such subsidies could even distort competition."Twist notes that the EU Commission investigated both the UK film tax credit and French video game tax system, both of which were eventually approved, setting a historical precedent to accept the UK's proposal. Further information on UKIE's defense can be found on its Facebook page.
EU Commission raises doubts over UK games tax relief, launching investigation
The European Commission announced an impending "in-depth investigation" into the UK tax relief for video games following doubts regarding its necessity. The breaks, announced last year by the UK government, are set to provide 25 percent tax relief on 80 percent of qualifying games' budget spent in the UK, a move long demanded by the country's ailing games industry. However, today's news raises serious doubts over whether or not they'll be implemented, with the EU Commission noting a number of concerns over the scheme.The European executive body not only doubts if the relief is needed to boost the country's games industry, but also noted the potential for positive discrimination towards "goods or services 'used and consumed' in the UK," as well as a "subsidy race" between EU states. The Commission also raised concerns over the proposed UK cultural test and whether or not that would produce "unique distortions of competition.""The market for developing video games is dynamic and commercially promising," said EU Commission VP of Competition Policy Joaquin Almunia. "It is not clear whether the taxpayer should be subsidizing this activity. Such subsidies could even distort competition."UK gaming trade body UKIE says it's "extremely disappointed" with the EU Commission's decision. In a response, UKIE noted such an investigation could delay the aid's implementation even if it was eventually approved."We believe this support is crucial in opening up the opportunity for developers to make culturally British games," said UKIE CEO Dr. Jo Twist, "But also as a vital incentive for development studios and large multinationals to base their development in the UK and nurture the talent here. We are still confident of having the scheme introduced and are fully committed to having it in place as soon as possible. A similar investigation into the French games tax relief system was successful but this took 12 months to conclude."While a recent report by UK trade association TIGA indicated some signs of recovery for the country's games industry, 2012 saw Wipeout team Studio Liverpool and 007 Legends dev Eurocom both close, as well as high street retailer GAME suffer financial meltdown.
UK games industry showing slight signs of recovery
UK trade association TIGA published a report this week, claiming that employment in UK games development grew by four percent in 2012.Looking deeper at the numbers shows us UK studios aren't making the huge games they used to, however, and are evolving into smaller studios supporting more mobile and tablet development.According to TIGA, from 2011 to 2012, creative staff across the UK grew from 8,888 to 9,224, which is where the modest four percent increase cited earlier comes from. The number of studios in the UK increased from 329 to 448 – that's 119 new studios and only 336 new jobs. The UK has shifted to smaller studios after years of layoffs and closures."Mobile and internet based gaming provide opportunities for growth; we have access to a highly skilled and creative workforce; and TIGA's Games Tax Relief will give a further boost to employment and investment from April 2013," said TIGA Chairman and Rebellion CEO Jason Kingsley.TIGA estimates the sector's contribution to UK gross domestic product increased from £912 million to £947 million in 2012. The UK finally passed tax relief for the ailing sector last year, having proven it passed the cultural test. [Image: Christos G. via Shutterstock]
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.
UKIE wants 30% games industry tax break, UK begins tax plan scrutiny
UKIE, a trade group for the entertainment industry in the UK, joined UK gaming trade association TIGA in calling for a tax relief flat rate of 30 percent across the industry, in the hopes of stimulating the UK's game development business. In March, UK chancellor George Osborne pledged to "turn Britain into Europe's technology centre, starting with digital content," by extending the country's film tax breaks to the TV, animation and gaming industries.Yesterday was the deadline for suggestions to the UK government on how the gaming tax breaks should be handled. TIGA previously suggested the 30 percent flat rate, or an alternative tiered rebate giving 25 percent relief to projects costing £250,000 ($400,000) or more.After consulting with more than 200 UK companies, UKIE proposed relief should extend to the entire industry, covering indies, large studios and new companies established by parties overseas -- all with a 30 percent relief rate, regardless of budget. UKIE included relief for DLC and post-launch support in its proposal.The tax relief is poised to begin in April, pending parliamentary approval and a round of summaries, scrutiny by tax professionals and consultation. Edge has a round-up of the whole process here.
UK finally implementing game tax relief
The UK government announced today it would finally provide tax relief for game developers, which comes as welcome news to the region's struggling scene. The relief will take the form of £15 million in 2013-14, with £35 million in 2014-15."Our research shows that Games Tax Relief should generate and safeguard: 4,661 direct and indirect jobs; £188 million in investment expenditure by studios; increase the games development sector's contribution to UK gross domestic product by £283 million; generate £172 million in new and protected tax receipts to Her Majesty's Treasury, and could cost just £96 million over five years," TIGA CEO Dr. Richard Wilson stated today.With some luck, the relief will help slow the "brain drain" occurring in the UK games industry following numerous studio closures.Wilson also said, "Tax breaks for games production will ensure that the UK remains at the forefront of video game development."That's a nice dream, but current tax break champion Canada and many others are ahead of the UK by a mile ... er, kilometer. [Pixelbliss via Shutterstock]
Cryptic is offering relief from tax-time woes
Cryptic, the maker of your favorite MMO Star Trek Online and the infamous Champions Online, has decided that this year's tax refund is insufficient. In the interest of giving you some relief, Cryptic is offering a 20%-off-everything sale on the C-Store items for STO and CO, meaning everything from now until Monday, April 18 at 1 p.m. EDT will cost 20% fewer Atari tokens. Those Elemental A-Symmetry Tights you have been staring at can now be yours for 380 tokens, and don't forget The Original Series bundle for your Star Trek Online ship and crew -- that only costs 1400 Atari tokens. For those looking to finally make a commitment to either or both of these games, this Tax Relief sale includes life-time subscriptions for Star Trek Online and life-time gold memberships for Champions. To find out where you can spend more of your tax refund -- or tomorrow's paycheck -- glide on over to the C-Store before 1 p.m. on Monday -- ooh! A Bajoran Militia costume pack!
TIGA and ELSPA form Steering Committee for UK tax relief
Looks like the UK's video game industry organizations aren't going to take the recent removal of their hard-fought game development tax relief plan from the nation's Emergency Budget lying down. Earlier today, TIGA and the ELSPA announced their partnership on a "Steering Committee" to investigate why the tax plan was put on ice. The duo plans to review the original submission to make a more compelling argument for gaming industry tax breaks. Hopefully the group will find an effective solution for getting its plan approved. You know, a solution better than "let's throw our full support behind candidates in the upcoming election who promise to endorse our tax plan, only to have them forget about us mere moments after taking office." The press release is posted after the break. [Image credit: Bashed]
UK govt cancels plans for video game tax relief
TIGA's years-long campaign to bring tax relief to the UK video game industry has come to a rather disappointing conclusion. Chancellor George Osbourne (pictured above) revealed the nation's budget plans earlier today during a speech at Westminster, announcing that "planned tax relief for the video games industry will be canceled." According to TIGA CEO Richard Wilson, this surprising omission flies in the face of "pre-election pledges made by the Conservative Party and by the Liberal Democrats to support and introduce Games Tax Relief." GamesIndustry.biz points out that Osbourne's proposed budget still benefits smaller, start-up developers in select parts of England, who will receive exemptions for £5,000 (about $7,400) of National Insurance contributions for each of their first 10 new hires; though this doesn't come close to the sweeping tax reform promised to the UK games industry just a little over a month ago. [Image credit: Auto Express]
UK moves forward with game tax relief
[Flickr: Bashed] Following exhaustive lobbying by TIGA, the UK will implement tax relief for video game developers. The change will allow game companies to keep more profits from successful products and receive tax credits to reduce losses when their games don't perform well. TIGA CEO Richard Wilson believes that the relief will "protect 3,550 graduate level jobs, increase or safeguard £457 million in development expenditure and encourage developers to adopt new business models and create new intellectual property." He continued that it was a "decision at the right time for the right industry." The UK games industry has been hit particularly hard by the current economic climate and further affected by a lack of recognition for the sector. In stark contrast is Canada, with its favorable tax breaks, as proven once again this past week as Warner Bros. announced it was opening a major studio in Montreal.
Prime Minister Gordon Brown commends U.K. game industry
[Flickr user Cory M. Grenier] U.K. Prime Minister Gordon Brown recently recorded a podcast -- yes, a podcast (mp3) -- which aired right before the kickoff ceremonies for the Global Investment Conference held in London on Monday. During the podcast, Brown commended the efforts of the U.K.'s game developers and publishers, stating, "we're leading the way in creative industries, by far the biggest producer of computer games in Europe." TIGA, the U.K. game industry trade organization, is hoping Brown's address is a sign of support for the game developer tax relief plan the group has been trying to push through parliament for more than two years now. Had they listened to Brown's other podcast, "The Uber1337 Video Game Talk Show," they would have heard a much stronger sentiment much earlier. [Via Edge Online]
Report: UK government rejects gaming tax break proposal
[Image credit: Bashed] The Guardian reports that the British government will likely reject the Games Tax Relief proposal. According to the paper, the video game industry "contributes more to the UK economy than the film industry," yet doesn't receive the same assistance from the government. All of this is leading up to Tiga, the UK's trade association for the video game industry, either owning the role of "The Boy Who Cried Wolf" or Cassandra of Greek mythology. The organization claims that 1,700 jobs will be lost without tax breaks and that competition from other countries, like the US, France, and especially Canada, is too strong. Dundee and Manchester are to receive a £10 million cash injection from the government, but that probably pales in comparison to government tax relief. It appears that Tiga is going to have to take a gamble on the Shadow Lords soon. [Via Edge]
TIGA delivers petition for tax relief to UK government
[Image credit: Bashed] UK video game industry trade association TIGA delivered a petition today to 10 Downing Street (that's where Her Majesty ... oh, it's just the British Prime Minister's residence), seeking the introduction of Games Tax Relief. The petition was signed by 55 "senior industry figures," which gives the proposition a bit more weight than the standard internet plea. The argument set forth by Richard Wilson, CEO of TIGA, is that "if it is right to provide tax relief for the UK film industry then it is also right to provide tax relief for the UK video games sector." TIGA's push on the UK government is being framed as a matter of survival for the British games industry. The organization previously stated that 1,700 jobs will be lost without tax breaks and that the current government funding structure for the games industry is "incoherent." If TIGA doesn't receive assistance soon, the group can always accept the outstretched hand of assistance from the ominous-sounding "Shadow Cabinet."
