Corporation tax cut is fairer and more cost-effective, department says

Govt didnâ??t want to â??pick winnersâ?? with tax break

The Treasury has told Develop it axed plans for game tax breaks because it wasn’t convinced the policy was fair in relation to other industries.

"The Government believes that lower rates for all, rather than attempting to pick winners through sector specific reliefs, will usually be the fairest and most cost-effective way to support economic growth and minimise distortions,” the department said.

The official line comes as Develop investigates why some game industry bodies actively opposed game tax breaks.

The Treasury points out that it has reduced corporation tax from 28 per cent to 24 per cent over the next four years – a wide-ranging measure that gives Britain a comparatively low rate compared to most leading economies.

Bobby Kotick – the CEO of the world’s largest third-party publisher – didn’t appear to have corporation tax rates on his mind when suggesting the UK is becoming too expensive to invest in.

“For us to continue to invest in the UK there needs to be an incentive provided for us to do so,” he recently said.

“The talent pool in the UK is among the best in the world for what we do. But we really need to see some more incentives. We are seeing great incentives in Canada, Singapore and eastern bloc countries.”

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