EU Pause UK Games Industry Tax Break Proposal

Posted by admin at 15:51 on 13 Feb 2017

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The European Union has opted to probe into a planned tax break for UK video game industry. The break was set to come into play on 1st April 2013, but involvement of the EU has scuppered the concept, at least for the immediate future. The EU states the grounds for its proposed probe are founded on the basis that there is “no obvious market failure” requiring address in the games industry.

The UK Government remains committed to the proposed break which is set to rival the existing EU approved tax breaks already on offer in France and Canada. The basis of the offer would see 25% tax relief offered on up to as much as 80% of a game’s production budget providing the funds are invested in the UK (largely through designing, producing, and testing). However, the Government are keen to emphasise the responsibility of this offer, taking care not to extend the offer to games produced with a primary focus of gambling, advertising, or other material considered as “extreme”. The Government has also suggested additional boundaries would be implemented to avert the break being adopted by the non-commercial games market.

Currently, France and Canada already provide a similar relief structure. However, in France the tax break is restricted to games whose development costs total at least 150,000 euros (£129,128). The UK have opted not to levy such a threshold after a consultation exercise underlined the potential value of making the tax break available to the flourishing smart device video games market.

The RM2 Partnership work with a number of software developers, assisting them with a wide variety of share plan matters and support them to recruit and retain their key employees. For more information on how we can help, please contact The RM2 Partnership on Liz.Hunter@rm2.co.uk, or call the office directly on 020 8949 5522.