European Commission slaps another delay on UK games industry tax breaks

"Not clear whether the taxpayer should be subsidising this activity."

The hard-fought battle for tax breaks in the UK games industry has been dealt another blow: a further delay, because the European Commission has decided to do an in-depth investigation into the scheme.

It could give the UK games industry an unfair advantage over the rest of Europe and kick-off a continent-wide games-tax-break race, the EU Commission argued - which is apparently a bad thing.

Plans to introduce the tax relief programme were put on hold last month when the EU Commission failed to approve the UK government's points-based cultural test - a survey to determine which projects qualified for the scheme.

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Waka waka.

"The market for developing video games is dynamic and commercially promising," said Joaquin Almunia, European Commission vice-president (thanks, GamesIndustry International). "It is not clear whether the taxpayer should be subsidising this activity. Such subsidies could even distort competition."

There was "no obvious market failure" demanding such a scheme, he continued.

"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," UKIE boss Jo Twist said.

"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."

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Tom Phillips

Tom Phillips

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