The European Commission is to investigate the proposed tax credits for the game industry, leaving Ukie disappointed but determined to push through the measures.
The EC has doubts over whether tax aid is necessary to encourage game development in the UK, and said that it will question if offering tax credit would fuel a subsidy race between Member States in its investigation. It will also look into how the proposed ‘cultural test’ could support relevant games without leading to undue distortions of competition.
It will delay further the round of tax credits that Ukie has been lobbying for. The initiative has already been delayed once, as we reported last month.
“We are extremely disappointed that the European Commission has decided to open an in-depth investigation into production tax credits for the UK games industry,” said Ukie CEO Dr Jo Twist. “We believe this support is crucial in opening up the opportunity for developers to make culturally British games, but also as a vital incentive for development studios and large multinationals to base their development in the UK and nurture the talent here.”
“We are still confident of having the scheme introduced and are fully committed to having it in place as soon as possible. A similar investigation into the French games tax relief system was successful but this took 12 months to conclude.”
Ukie will now be aiming to help the EC’s investigation by gathering evidence to show that the UK game industry isn’t producing enough games to compete on a global scale. “We will be reaching out to all games businesses and working with TIGA to make sure that the industry speaks with one voice on this crucial issue,” added Twist.