Ukie makes final recommendations for tax relief legislation

6 February 2013 - London, United Kingdom – Games and interactive entertainment trade body, Ukie, has today issued its final thoughts after further conversations with the industry on the proposed tax relief legislation for UK games businesses.

Ukie has once again said that it is broadly happy with the proposed legislation that will determine how the tax credit will work for UK companies large and small as outlined previously:

  • Proposed rate of production tax relief set at 25% for all UK games development
  • No minimum budget threshold for games to qualify for relief
  • The proposed tax relief scheme recognises the new business models and ways of making games which stretches beyond ‘release’
However, Ukie have also called for government to clarify some areas of the legislation. The main points made in Ukie’s response are:
  • The legislation must make it clear that businesses can claim for post-release development including relevant QA
  • It has to be clear how games using new business models, such as free to play and DLC-based content, will see post-release development supported
  • Ensure that games are recognised by definition as software, whether that be in the legislation itself or in guidance
  • It must be clear that all games intended for release can potentially qualify for the relief, including games for educational or training use
  • The cultural test administrative team must be well resourced with games expertise to meet likely high level of applications
  • The cultural test must include references to ‘underlying material’, and make it clear that this can include the concept for a game, even where the game does not rely on a narrative 
  • There should be a review of how the relief is operating after its first year, to ensure it benefits all parts of the games industry
  • Government must start drafting the crucial HMRC Guidance document as soon as possible. This must include, amongst other things:
    • Clear explanation of how early-stage costs will be adjudicated
    • Advice on what forms of brand-funding and licensing will be acceptable
    • Transitional arrangements for games already in production at start of scheme
    • Interaction with R&D credits
    • How grants and subsidies will be netted off
Ukie also said that it was broadly happy with the shape of the EU-required cultural test that games will have to pass in order to qualify. However, Ukie did express some concern about the timings of the EU sign off of the test and have offered to assist in liaising with officials in Brussels to make sure that this happens in time for the implementation of the scheme by this April.

Dr Jo Twist, CEO Ukie said: “It is vital that we get the new tax relief system right from the very start. The new system needs to reflect how games are made today and support businesses, big and small. Whilst the proposed legislation looks good, we have pored over it in detail and talked with all parts of the industry to make sure it will operate as effectively for them as possible. We urge government to seriously consider the points made in our response, so that we have a system that will really help us compete more effectively with Canada, for example, as the best place to make and sell games and interactive entertainment.”

Vice Chair Ukie and Life President Eidos Ian Livingstone CBE, said: “The proposed introduction of tax breaks and the recent announcement of computer science in the English Baccalaureate will combine to make the UK the best place to develop video games. Ukie has played a major role in the consultation process for tax relief legislation to ensure it is appropriate, practical, effective and available to all development companies, large and small.”

Jay Bedeau, CEO of UK developers, RIE STUDIOS said: “For a small start-up like ours having an effective tax break that we can really benefit from will make a big difference. We’re pleased to see that there is no minimum budget threshold for games to qualify for relief and we hope that government listens to the further points made by Ukie, particularly in making clear how QA in post-release development will be included, and that the UK games industry ends up with the world leading tax relief that this country needs alongside a flow of highly skilled talent into the industry.”

 

 

-ENDS -

 

 

Contacts:

For all press enquiries, please contact the Ukie press office on T: +44 (0)20 7534 0580 or E: press@ukie.org.uk

About Ukie

The Association for United Kingdom Interactive Entertainment or Ukie (pronounced YOU-KEY) is a trade body that aims to support, grow and promote the whole of the UK’s games and interactive entertainment industry. Founded in 2010 (although formerly known as ELSPA), Ukie’s membership includes all the major UK and global games publishers and the best of UK development talent - from promising start-ups to some of the biggest, most successful studios operating in the UK today.

We also have distributors, academic institutions, new publishers, and media outlets that are integral to the lifeblood of the industry as part of the family.

Ukie works with government to champion a range of issues including age ratings, education and skills, access to finance and protecting intellectual property rights. It also works with the media to ensure true and accurate representation of the sector by raising awareness of the industry’s positive economic contribution and the societal benefits of gaming to policy makers, regulators and consumers.

One of Ukie’s key roles is to support its members by providing them with key market information, promoting careers and offering the business support services, training and best-practice knowledge to enable them to operate most effectively.

We also offer a comprehensive events programme to give the games industry access to key information, leading industry figures and give everyone the chance to network. You can see our events programme here http://ukie.org.uk/events

In addition, Ukie compiles weekly, monthly and annual retail charts and sales reports for the UK market.

Twitter: @uk_ie

Facebook: Ukie 


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