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'Cultural Definition' To Determine UK Games Tax Relief

by Robert Lee,, London

05 October 2012

The UK government is consulting on proposals for a ‘cultural test’ which will determine eligibility for a new games tax relief.

The consultation follows up on Chancellor George Osborne’s Budget announcement that the government will introduce corporation tax reliefs for the animation, high-end television and videogames industries from April, 2013. The proposed cultural test will identify culturally British videogames, animation and high end television that might be considered eligible for the new tax relief.

Launching the consultation, Creative Industries Minister Ed Vaizey said that the government “is committed to supporting these creative and dynamic sectors by introducing tax reliefs for these industries.”

TIGA, the trade body representing the videogames industry, has also called for a precise definition of videogame, which it says would be be useful to the government in implementing the tax break. It has submitted the following definition to the government: “A game is interactive entertainment software whose primary purpose is to entertain or educate.” TIGA says that its intention in defining a videogame as such is to provide a definition that is future proof, and is as short and wide as possible.

Vincent Scheurer, TIGA’s Company Secretary, said: "It is important that we define the word ‘game’ in a way which does not artificially limit the availability of tax relief for games companies in the UK. The rules governing the availability of the relief will include a number of additional restrictions on the types of games and expenditure which can qualify, so we need to ensure that the starting-point, the core underlying concept of a ‘game’ itself, is wide enough to cover all types of games.”

Dr Richard Wilson, CEO of TIGA, added: "As well as being of general interest, a specific definition of what makes a videogame will have a practical application in so far as games tax relief. It will ensure that tax relief is aimed at the right sector for the benefit of those squarely in the videogame sector.”

TAGS: tax | tax incentives | interest | corporation tax | United Kingdom | tax credits | tax breaks | tax reform | retail

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