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Chancellor George Osborne confirms UK video games tax credits

UPDATE: UK game developers welcome decision.

Chancellor George Osborne has confirmed the introduction of tax credits for the UK video game industry.

In his Budget 2012 speech, the Chancellor of the Exchequer said tax credits will "support our brilliant video games and animations industries". The Government is yet to announce details of the relief, however, but we do know the plan is to have it begin from April 2013.

UK lobby groups such as Tiga have long called for tax breaks to help boost the industry on these shores. The lack of tax credits have been blamed for an "exodus" of game development talent abroad.

Tiga this afternoon said the announcement was a "decisive victory". "This is a brilliant decision by the Government and terrific news for the UK video games industry," Tiga boss Dr Richard Wilson said.

Tiga believes tax relief will generate and safeguard over 4500 direct and indirect jobs; £188 million in investment expenditure by studios; increase the games development sector's contribution to UK GDP by £283 million; generate £172 million in new and protected tax receipts to HM Treasury, and could cost just £96 million over five years.

UK game industry veterans were unanimous in welcoming the decision.

Jason Kingsley, boss of NeverDead and Sniper Elite V2 developer Rebellion, said tax credits will "save jobs and companies, promote growth, build financial confidence and bring in much needed export income from around the world".

Crytek UK MD Karl Hilton said it will "enable the UK games sector to compete on a more even playing field. It will also promote the creation of high skilled jobs, enhance investment and stimulate an export focussed industry".

And Andrew Eades, CEO of Relentless, added: "UK developers have been competing on an uneven global playfield. Today's decision by the Government to back TIGA tax break campaign will help ensure that we can remain competitive in the global market."