Government to reconsider tax relief for games

The UK Government is planning to reconsider whether or not the UK games industry should be supported with tax incentives, according to letters from Chancellor George Osborne.

Responding to Dundee MSP Joe FitzPatrick's complaints that companies in his area were losing out to those in other countries, Osbourne wrote that the Government will review plans later this year.

"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," Osbourne wrote, according to Eurogamer.

"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."

The UK games industry has long lobbied for tax incentives that match those provided in other countries, pointing out that the UK film industry is given similar support despite being much smaller. However, while tax relief was promised by the previous government, the new Con-Lib coalition moved to scrap those plans.

Trade groups for the UK games industry have worried that the lack of support will push developers and publishers abroad, to areas where economic support is provided.

You can check out our Made in the UK season from earlier in the year for more information on the state of the UK games industry. Let us know your thoughts in the forums.