THE Chancellor’s decision to offer tax relief to the video games sector has been warmly welcomed by creative industries support agency Northwest Vision and Media (NWVM).
The announcement in Wednesday’s Budget speech was also applauded by video games trade association TIGA. It says that, without such a measure, the sector could see jobs and investment move to countries such as Canada where tax relief is provided.
Video gaming is a major industry in Merseyside and Cheshire, with firms including Sony Computer Entertainment Worldwide Studios Europe and Bizarre Creations employing hundreds.
Enda Carey, sector lead for games, digital and creative services at NWVM, said: “We fully support the decision to offer tax relief to the UK video games industry, and we’re really pleased that the Government has recognised the economic and cultural contribution of this growing industry in the UK.
“This move will be welcomed here in the North West, which has such a strong heritage in video games content and is home to some of the finest and most internationally-renowned games companies in the country. We look forward to viewing the full details of this announcement.”
Dr Richard Wilson, chief executive of TIGA, wants to see tax relief operate in a way similar to UK Film Tax Relief, which he said had “resurrected the British film industry”.
He said: “In order to qualify for relief, a company would have to fall within the scope of UK Corporation Tax.
“Additionally, video games would need to pass a cultural test, scoring against criteria of European heritage and game locations, languages, innovation, narrative, and location of development and key development staff.
“Video games that passed the cultural test would then be entitled to benefit from Games Tax Relief.
“If the game makes a profit, the development company would then be able to use the Games Tax Relief to reduce the amount of tax payable on that profit. If the game makes a loss, the development company would be able to use the Games Tax Relief to obtain a cash tax credit which would reduce that loss.
“An independent organisation with knowledge and experience of video games production would need to administer the cultural tests, checking submission criteria are met and policing the relief.”
