Tax break climbdown a blow for UK games sector

Now the government has scrapped plans for videogame tax breaks in the UK, the region could be seen as risky compared to locations such as France and Canada which provide healthy environments for games companies to thrive.

That's according to Rupert Clark, video games expert at business advisory firm Deloitte, who was commenting after George Osbourne cancelled plans to help the UK industry in his budget today.

"This is a blow to the UK games industry and could reduce the chance of international investment and new jobs in the UK," offered Clark. "With lower average salaries than the US, a wide range of established and experienced studios and great talent across the industry, the UK is now a great investment opportunity for major international games companies. 

"Without a tax break, game development in the UK could appear risky when compared with countries such as France and Canada where tax breaks are available. UK games companies will now have to compete in a global market without the support provided to many of their competitors. 

"Although the UK industry continues to be strong performer, it has dropped from third in the world to fourth in the last two years and the scale of games produced in the UK could follow.  The government has an opportunity in the next budget to support a growing employer and driver of export revenues."

Tax breaks had been promised before the new coalition government formed, but soon after the Liberal Democrat and Conservative coalition went silent on the matter, with industry sources suggesting any assistance would not be forthcoming.