UK Government Proposes Tax Relief for Creative Industries

December 5, 2012 -

Today the UK Government published a document proposing strong support of Chancellor George Osborne's earlier Autumn Statement, which would give qualified games companies tax-relief set at a rate of 25 percent.

"Following consultation on their design, the Government will ensure that the reliefs are among the most generous in the world by offering a payable tax credit for all three reliefs worth 25 per cent of qualifying expenditure," the document read in part.

"Under these reliefs, qualifying companies will be able to choose between an additional deduction at a rate of 100 per cent of enhanceable expenditure or a payable tax credit at a rate of 25 per cent of qualifying losses surrendered," the statement continues.

The Autumn Statement also calls for an extra £6 million investment in creative industries training.

Full details of the tax relief will be confirmed on December 11th, according to the Department for Culture, Media and Sport.

Trade groups TIGA and UKIE were delighted with today's news. UKIE said it was pleased with the number, despite the fact that it was looking for 30 percent. TIGA said the government aid will help the UK reclaim its position in the games industry.

"This first detail of the tax relief seems a positive step for our members and the wider industry," said UKIE CEO Jo Twist. "Whilst we called for a 30 per cent rate of relief for the scheme, Ukie was nonetheless pleased to see the rate set at 25 per cent, giving the games sector parity with other UK creative industries. As soon as the full draft legislation is published we’ll be poring over the finer details to ensure that the fine tuning and implementation of the proposal is fully in line with the needs of our industry."

"Tax breaks for games production will ensure that the UK remains a world leader in the high technology video games development industry. A single 25 per cent level of relief will be simple to administer and economically impactful," TIGA CEO Dr Richard Wilson said. "Yet we will have to monitor the actions of our competitors: the province of Quebec in Canada already boasts a 37.5 per cent level of tax relief. Tax breaks for the creative industries will boost production in games development, animation and high end TV production. They will contribute to a re-balancing of the UK economy away from an over-reliance on public sector employment and financial services towards highly skilled, export focused industries.”

Both trade groups applauded the government’s decision to introduce a £6 million skills fund.

Sources: Develop and Develop


 
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