Coalition government reverses position in dramatic Budget announcement

UK Govt makes shock games tax breaks proposal

The UK government has declared its intention to establish a nationwide games tax break policy, in a dramatic manoeuvre that leaves the British sector in shock and jubilation.

Standing in the Commons for his 2012 Budget speech, Chancellor George Osborne said the UK games development industry would benefit from similar tax break measures that benefit the UK film industry.

"We want to turn Britain into Europe’s technology centre," he said.

Specific details of the measure have yet to be announced. At the time of going to press, the 2012 Budget documents have not been released for review.

A British games tax relief policy, if enacted, would become the latest and perhaps most significant twist in a six-year battle of wills between industry and government.

“This is a brilliant decision by the Government and terrific news for the UK video games industry,” said Richard Wilson, the CEO of games trade association Tiga, who has relentlessly campaigned for tax breaks since 2008.

“Ministers should be warmly congratulated for this brilliant decision,” he said.

Meanwhile, trade group UKIE declared it would “be offering practical help to games businesses of all sizes to understand how to make the most of tax breaks and other funding that is available to them”.

The association’s chief executive, Jo Twist, said UKIE “will be working hard to promote the UK to the rest of the world as the best place to create all types of games and interactive entertainment formats, from apps, to innovative connected formats, through to big, blockbuster triple-A titles”.
Osborne and the Treasury have hitherto been seen as key opponents to the tax break campaign in recent times.

In 2010 the Chancellor actively abolished Labour’s game tax relief policy, branding it “poorly targeted”. His aides would later say that even the debate for tax relief was off the table.

The government’s surprise reversal policy comes in what Osborne has labelled as “a Budget for working people”.

He and cabinet ministers say the 2012 Budget features “no unfunded giveaways”, meaning that the money raised for games tax breaks will need to come via other economic measures.

Osborne said the priority was still to cut the deficit.

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