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Budget 2012: Video game tax relief

The video games industry has shown significant growth in the past few years the Chancellor is now recognising this by introducing tax breaks for the investors in the industry. 

The summary:

Tax relief for the video-game industry has been introduced by the Chancellor. It will also help the animation and “high-end” TV production industries.

From the horse’s mouth:

Chancellor George Osborne said: “The film tax credit, protected in our spending review, helped generate over £1 billion of film production investment in the UK last year alone. Today I am announcing our intention to introduce similar schemes for the video games, animation and high-end TV production industries.

“Not only will this help stop premium British TV programmes like Birdsong being made abroad, it will also attract top international investors like Disney and HBO to make more of their premium shows in the UK. It will support our brilliant video games and animation industries too.

Our verdict:

Again, tax relief for the video games industry (plus animation and high-end TV industries) is a positive move by the Chancellor. Because it based on the current film tax scheme, we know it works. It will encourage investors to put their money in these creative industries.

But Osborne also announced a new cap on tax relief for investment, in that relief over £50,000 in any one tax year will be limited to a 25 per cent rate. This could limit investment in the creative industries.

Your verdict:

Dr Richard Wilson, CEO of games industry trade body TIGA: “This is a brilliant decision by the government and terrific news for the UK video games industry. This will benefit not just the UK games development and digital publishing sector but also the wider UK economy. Tax relief for the video games sector will increase employment, innovation and investment in the UK video games industry.”

Jason Kingsley, CEO and creative director of Oxford-based Rebellion: “Congratulations must go to the Chancellor, the government and its officials in making this long hoped-for decision. It will save jobs and companies, promote growth, build financial confidence and bring in much needed export income from around the world. It is exciting that they have made such a positive move and we look forward to working with them on the details of implementation.

Barry Murphy, tax partner at PwC: “For many years the games industry has asked to be recognised for the value it drives, in a manner similar to the film Industry. It looks like it’s now game on, with the Chancellor announcing tax breaks will extend to games, and some TV productions come back into the tax relief net too. This is good news for the British industry as it was under increasing competitive pressure from other countries offering lucrative credits.”


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