UK video game tax relief cancelled

The UK government announced on Tuesday that a planned tax relief for the gaming industry will be cancelled.

A couple parts of the Digital Britain report was geared towards gamers. One was a small tax break for game developers in the UK similar to ones already in place in Canada and South Korea. The UK was the third largest developer of games, two years ago, now they rank fourth. The tax break was supposed to help keep talented developers in Britain. According to the Guardian, British game talent is "considered some of the most creative, best-trained and highly skilled in the world." The other item in the report said the government would back the Pan European Game Information (PEGI) system rather than the current system run by the British Board of Film Classification (BBFC) for game ratings.

Now the government has decided that the planned tax relief for the gaming industry will be cancelled. By removing the tax break for the developers the government will save "£40 million in the 2011-2012 financial year, and a further £50 million in each subsequent year," according to Thinq. TIGA, a trade association representing the UK gaming industry, condemned the decision saying, "the Coalition Government has broken pre-election pledges made by the Conservative Party and by the Liberal Democrats to support and introduce games tax relief."

The UK government did include a tax break for corporations which will benefit all businesses including development studios but TIGA CEO Richard Wilson says the corporation tax break "does not address the specific needs of the video games sector."

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