TAX NEWS - June 2010

United Kingdom Tax: Budget Axes Gaming Tax Relief

New budget will hit UK developers and publishers

Earlier this year we reported that the UK games industry was to receive tax breaks, acknowledging its growing contribution to the UK economy.  Announced in March, Alistair Darling's budget promised tax relief worth approx. £200m over four years.

At the time, Dr. Richard Wilson, Chief Executive of the gaming industry's trade body, TIGA, referred in a statement to the treasury's decision "inspired":

" Games Tax Relief will ensure that the UK remains a world leading developer of video games. Games Tax Relief is good for the UK video games industry, good for UK consumers and good for the UK economy."

The coalition government's austerity drive will see these tax breaks revoked, and Wilson has condemned the move as both a "betrayal" and a "mistake":

"We are competing in a very intense and competitive market," he said. "The UK's competitors in Canada, in many states of the USA, in France and in Australia all have tax breaks at a state level or at a local level. This is already having the affect of drawing investment away from the UK. So if we don't get this tax relief, we lose out on investment, we lose out on job creation and we lose out on the opportunity to become a leader in this very important digital industry.