There’s good news ahead for video game developers in the UK, as recent reports indicate the European Commission has green lit the move to allow studios and development teams across the United Kingdom to have access to tax relief benefits. After a brief period of uncertainty, this latest news reveals that around a quarter of all video game developers in the UK will be eligible for the scheme.
The EC confirmed that the plans to grant these tax benefits are well within line of European Union rulings. They have also found that “the measure provides incentives to developers to produce games meeting certain cultural criteria, in line with EU objectives.”
This will come as a pleasant surprise to many game studios since the Commission was not initially convinced that producers of video games were struggling financially without tax incentives. Joaquin Almunia, Vice President in charge of competition policy, stated that the “initial doubts have been dispelled,” and 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.”
As not all UK development teams will be automatically eligible for tax relief, there will be a cultural test beforehand that will need to be passed. The studio’s origins – including that of its individual team members – will be taken into account, with UK-based companies most likely to be seen more favourably. Game content will also be taken into consideration, including the story, before eligibility is assured.
The news came after the latest UK budget was announced earlier this month. Although video games missed out on the budget, the tax relief incentive was given the go ahead by the EC.
