EC approves UK video games tax breaks

Tax breaks for the UK video games industry are happening.

The ‘will they won’t they?’ saga that has rumbled on for years has now been green lit, as previously confirmed by MCV last week.

The European Commission has concluded that UK plans to grant certain tax relief to producers of video games are in line with EU state aid rules,” the EC has confirmed. The Commission has found in particular that the measure provides incentives to developers to produce games meeting certain cultural criteria, in line with EU objectives.

The EC has said that while it was not initially convinced that the video games sector was struggling without tax incentives, it has subsequently been convinced by the cultural benefits such a program would afford.

The fact that the initially proposed territorial spending obligations imposed on beneficiaries of the scheme also helped to alleviate concerns.

"Our initial doubts have been dispelled,” Commission Vice-President in charge of competition policy Joaqun Almunia said. The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing."

It is estimated that around 25 per cent of UK produced games will be eligible.

Added the EU: Without this support the number of new culturally British games is likely to decline considerably. The Commission therefore concluded that the measure promotes culture without unduly distorting competition in the Single Market.”