Responding to today’s Budget announcement by Chancellor George Osborne, Ukie CEO Dr Jo Twist said the following about the lack of any announcement on the long-awaited games production tax credits by the Chancellor.
Dr Twist said: “The ongoing delay to the UK games tax relief scheme has been very frustrating for UK developers. Whilst there was not any announcement about the European Commission’s decision in this year’s budget, we continue to be confident that our case is strong and that we will receive word from the EC soon. We know that the Treasury and other UK government departments have worked hard to convince Europe of the case for UK Games Tax Relief, and we will continue to do everything we can to help push tax relief over the finishing line and get this vital scheme in place for UK developers as soon as possible.”
The full Budget document (the Red Book) sets out a small change to the legislation behind Games Tax Relief, in paragraph 2.114, which would be enacted should the relief get clearance. However, the relief remains subject to state aid clearance, meaning that final European Commission approval is still required before it can go ahead.
There was other relevant news for games companies in the Budget however, with announcements of:
- The Seed Enterprise Investment Scheme to be made permanent
- Extra £85 million in next two years in grants to employers to support 100,000 new apprenticeships
- £20 million over 2 years to support degree-level apprenticeships
- Confirmation that Corporation Tax will be 21% in April, 20% from April 2015
- £2,000 Employment Allowance announced last year will come into force in April – reduces Employer National Insurance Contributions
- UK Export Finance will be reformed to support intangible exports, be much more proactive in support of UK businesses, and have its direct lending budget double to £3 billion at the lowest permitted interest rates.
- R&D Tax Credit for loss-making SMEs will increase from 11% to 14.5%
- Enterprise Zone discounts on business rates and Enhanced Capital Allowances will be extended by 3 years
- Double the Annual Investment Allowance for businesses to £500,000 until the end of 2015
- Provide £42 million over 5 years to set up the Alan Turing Institute to lead the world in Big Data and algorithm research
In response, Dr Twist said: “Many of these new announcements are welcome steps which should help further cement the position of the UK as the best place in the world to make and sell games. Helping SMEs to grow more quickly is particularly crucial, and the announcements on SEIS and export support should have a good impact in this regard.
“However, it is Games Tax Relief which will have a real impact in unlocking our sector’s cultural and economic potential, as the government recognised when introducing the scheme. It is vital that we get it in place as soon as possible.”