UK Videogames Tax Break - Summary

Following the UK government's Budget speech on March 24, which noted plans to support the UK videogames industry with a system similar to that currently available to the film industry, there have been a lot of questions about what that would mean.

The news itself came as a surprise to most people, including those who had been lobbying for it the hardest over the past few years - notably developer trade body TIGA and publisher trade body ELSPA.

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But prominent members of the industry were quick to welcome the move, seeing it as long-sought recognition for the role the games business has played in the UK economy in the past, and expressing hope that it would enable a resurgence in the country's industry scene - a significant proportion of which has been acquired by foreign companies or moved to more lucrative locations such as Canada.

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However, while the Budget speech gave no concrete details of what any measures would look like, any support seems likely to be based on a 'cultural' test, as is currently the case with the film industry in the country - and broadly brings it in line with existing EU guidelines lobbied for by EGDF chairman Guillaume de Fondaumiere, which are currently in effect in France.

Such a test was hinted at last year in the publication of the Digital Britain report, which first suggested that support would be linked to this kind of measure.

This is all pure speculation at this point, and while any such move will be welcomed by most, as de Foundaumiere pointed out last year only 40 per cent of games produced in 2009 in France were eligible for support under that version of the cultural test, which may or may not be any indication of how a UK version of the rule would play out.

And finally, it's worth noting that all of this is in the context of a looming General Election, after which the present government may be unseated and a large proportion of what was announced could be discarded. Conservative shadow minister Ed Vaizey seems positive on his party's support for the games industry, but has made no promises should the government in the UK change. Meanwhile current polls suggest a hung Parliament could be the most likely outcome of the voting process, and if that happens then nothing is clear.