Whilst a drop in the top rate of income tax dominated budget day headlines, the UK's creative professionals were focused on a more low key announcement that had them breathing a collective sigh of
Whilst a drop in the top rate of income tax dominated budget day headlines, the UK's creative professionals were focused on a more low key announcement that had them breathing a collective sigh of relief.
Nestling beneath the headline statements in George Osborne's red box was the Chancellor's announcement that the government will introduce corporation tax reliefs for three types of culturally British creative output: video games, animated television programmes and high-end TV productions.
This was long-awaited and welcome news for many in the creative sector who had been lobbying hard for UK financial incentives. "The UK games industry is competing on an un-level playing field. Game developers in countries including Canada, France, Singapore and the USA receive tax breaks for games production, which effectively reduces the cost of game development." So argued, TIGA, the trade association for the UK games industry. Similarly, Animation UK, the body representing the UK animation industry, had claimed in its lobbying report that tax incentives overseas are "making it far harder to justify production in the UK."
Initial budget day excitement in the games and TV world soon turned to anticipation as it became apparent that the Chancellor's announcement was no more than a statement of intent. There was little additional detail made available and certainly no draft legislation in the Finance Bill showing what everyone wants to know: how the reliefs will work.
There is now much speculation about the details and the smart money is on the new reliefs being similar to the existing Film Tax Relief. We look forward to the consultation which the Treasury and HMRC tell us will be conducted this summer. That ought to reveal the Government's current thinking on the details. One common question we have been asked is whether TV productions will have to meet a minimum production budget spend of £1 million per hour to qualify. Whilst only the consultation will elaborate, we should put this question in context: this idea originated in a lobbyist's report, not from the George Osborne's office. Another question to consider: whilst it's easy to see how TV productions can be culturally British, what will the test be for video games, particularly given that they are often set in fantasy worlds?
Following the consultation draft legislation will be published in the Finance Bill 2013 and will be effective from 1 April of that year. But it will be subject to approval by the EU Commission. Like Film Tax Relief, the new scheme will be a form of state aid which would be unlawful without Commission approval.
Nestling beneath the headline statements in George Osborne's red box was the Chancellor's announcement that the government will introduce corporation tax reliefs for three types of culturally British creative output: video games, animated television programmes and high-end TV productions.
This was long-awaited and welcome news for many in the creative sector who had been lobbying hard for UK financial incentives. "The UK games industry is competing on an un-level playing field. Game developers in countries including Canada, France, Singapore and the USA receive tax breaks for games production, which effectively reduces the cost of game development." So argued, TIGA, the trade association for the UK games industry. Similarly, Animation UK, the body representing the UK animation industry, had claimed in its lobbying report that tax incentives overseas are "making it far harder to justify production in the UK."
Initial budget day excitement in the games and TV world soon turned to anticipation as it became apparent that the Chancellor's announcement was no more than a statement of intent. There was little additional detail made available and certainly no draft legislation in the Finance Bill showing what everyone wants to know: how the reliefs will work.
There is now much speculation about the details and the smart money is on the new reliefs being similar to the existing Film Tax Relief. We look forward to the consultation which the Treasury and HMRC tell us will be conducted this summer. That ought to reveal the Government's current thinking on the details. One common question we have been asked is whether TV productions will have to meet a minimum production budget spend of £1 million per hour to qualify. Whilst only the consultation will elaborate, we should put this question in context: this idea originated in a lobbyist's report, not from the George Osborne's office. Another question to consider: whilst it's easy to see how TV productions can be culturally British, what will the test be for video games, particularly given that they are often set in fantasy worlds?
Following the consultation draft legislation will be published in the Finance Bill 2013 and will be effective from 1 April of that year. But it will be subject to approval by the EU Commission. Like Film Tax Relief, the new scheme will be a form of state aid which would be unlawful without Commission approval.