U.K. Government Launches Games Tax Credit System
Britain hopes tax relief for video games will have a similar impact on the industry as tax credits have had for high-end TV productions in the U.K.
George Osborne, chancellor of the exchequer, the U.K. equivalent of other countries' treasury secretary or finance minister, on Friday officially launched Britain's new tax incentive for the games industry.
Osborne attended an event hosted by games industry body Ukie and the TV Coalition, representing companies from across the U.K. TV sector, in central London to trumpet the new video games tax credit and celebrate a similar incentive for high-end television productions, which the British government says has already added an additional $233 million (£140 million) to the U.K. economy.
During the event, figures were flung out extolling the economic and cultural impact of the high-end television relief. To date, there have been 38 applications for the TV tax relief with five productions given final certification, and $22 million (£13 million) spent in the U.K. A further 22 have interim certification with a projected total U.K. spend of $216 million (£130 million).
Ukie CEO Jo Twist said the new tax incentive for video games will have a similar impact on the U.K. gaming industry.
"The introduction of a tax relief for games will help our sector get back to the top of the global games leader board with world-class, made-in-the U.K. games," Twist said. "Our job now is to ensure companies of all sizes benefit and that we have a healthy and diverse flow of talented people to transform our innovative, creative sector into an economic powerhouse."
British video-game developers are already acknowledged as being among the best in the world. The hit Grand Theft Auto franchise, including most recent entry Grand Theft Auto V, was largely developed at Rockstar North, a video-game developer located in Edinburgh, Scotland.
Other attendees at the event Friday included TV coalition chair and chief executive of Pact, John McVay, and British Film Commission and Film London chief executive Adrian Wootton.
McVay said: “One year on from the introduction of the high-end TV tax relief, almost 40 productions have applied for this credit, rather than going abroad or not making their shows at all. This tax relief has supported the growth of the television industry, boosted our competitiveness and brought new employment and training opportunities to across the U.K.
Said Wootton: "The high-end television tax relief has allowed the BFC to promote the U.K.’s excellent talent, crew and facilities to a new international client-base, as well as creating exciting opportunities for our domestic industry, and the Animation Tax Relief is also making an impact on the U.K.’s innovative and award-winning animation sector. We look forward to working with the wider creative industries to secure similar results for the games industry."
Tax relief for games, high-end TV and animation were announced by Osborne in the 2012 budget. The tax breaks for high-end TV and animation was introduced last year, but the video game industry had to wait until the incentives received approval from the European Commission.
Gaming companies will be able to claim for qualifying expenditure starting on April 1, 2014.