As part of the 2012 Budget, announced today (21 March) by Chancellor George Osborne, the government will be reintroducing tax relief for the UK video games, animation and high-end television production sectors.
Tax breaks for the games industry were formerly introduced in the Labour government's last budget in March 2010, but plans were withdrawn in the coalition government's first budget in June 2010. Therefore, this new move is seen as a major victory for an industry that has been fighting to remain competitive with development studios in the US and Japan.
Activision Blizzard CEO Bobby Kotick definitely thinks that the governmental help will aid the UK's development community.
"This is a great first step and should put the UK in a stronger position to compete with other countries offering incentives for videogames production," he said.
"The UK is an important centre for development talent, employing 9,000 people in the videogames sector, and anything that promotes further investment should be welcomed."
UK games industry trade association TIGA has consistently campaigned for tax relief for games development for several years, and is understandably relieved to have secured the best possible outcome.
"This is a brilliant decision by the government and terrific news for the UK video games industry," said Richard Wilson, TIGA's CEO .
"This victory will benefit not just the UK games development and digital publishing sector but also the wider UK economy."
Although the figures on how the tax relief will break down are yet to be revealed, Dr Wilson believes that will increase employment, investment and innovation in the UK industry.
"Our research shows that Games Tax Relief should generate and safeguard 4,661 direct and indirect jobs; £188 million in investment expenditure by studios; increase the games development sector’s contribution to UK GDP by £283 million; generate £172 million in new and protected tax receipts to HM Treasury, and could cost just £96 million over five years," he said.
"Tax breaks for games production will ensure that the UK remains at the forefront of video game development."
Is this a wise move by the coalition government? Will your development company benefit? Let us know in the comments below...
Pic: (cc) The Prime Minister's Office