NEWS 19 April 2013

EC investigation further postpones Video Game Tax Relief

The European Commission has ruled that an in-depth investigation into the new Video Game Tax Relief scheme is required, on the basis that there is "no obvious market failure" that needs to be addressed.

This is despite problems for the UK video games industry in recent years, as it has struggled with development being moved overseas to countries outside the EC with more competitive tax environments.

The proposed Video Game Tax Relief was going to commence 1st April 2013, allowing video game developers to deduct 80% of qualifying expenditure from their taxable profits, or receive a credit of up to 25% of qualifying expenditure if they are loss making.

Whilst the Video Game Tax Relief is highly generous, there are certain criteria that must be met... it is based on development within the UK, also games must be certified as “culturally British” by the DCMS (Department for Culture, Media and Sport) and mustn’t have a primary focus of advertising or gambling.