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Govt. to reconsider tax relief for games

Industry to be consulted this autumn.

Dark blue icons of video game controllers on a light blue background
Image credit: Eurogamer

The Government is planning to review its policy regarding tax relief for UK games companies.

Or at least that's what Dundee MSP Joe FitzPatrick reckons, based on a letter he received from Chancellor George Osborne.

In it Osborne wrote, "The UK's R&D tax credit schemes provide an internationally competitive tax regime for R&D activity, providing nearly £800 million of relief and supporting around 7,500 innovative companies each year, including companies in the video games industry.

"To ensure the continued effectiveness of the schemes, the Government will consult with business in autumn 2010 to review the taxation of intellectual property, the support R&D tax credits provide for innovation and the proposals of the Dyson review."

FitzPatrick wrote to Osborne to warn that games companies in his constituency were losing out to those in Canada and France. He claimed the recent decision not to introduce tax breaks could result in 200 Dundee jobs being lost in the next five years.

"I welcome this announcement from the Chancellor which is a recognition that, although he did not introduce tax relief in the emergency Budget, he is willing to review that decision," FitzPatrick stated.

Richard Wilson, head of developer association TIGA, said, "The Treasury’s decision to drop Games Tax Relief in the June Budget was a mistake. The UK video games industry is export oriented, employs highly skilled people and is low carbon in output. It is an industry of the future.

"I don't believe it," he did not add.

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