Game developers in the U.K. will have to wait for tax breaks, as the government's Games Tax Relief program has been delayed past the target date of April 1, Treasury officials announced today in their presentation of the country's 2013 budget.
The European Commission, the governing body of the European Union, has not yet approved the "cultural test" that a game would have to pass in order for its developer to qualify for tax relief. The test, which the Treasury announced last December, awards points if a game is based in the U.K. or otherwise promotes British cultural awareness. Under the Games Tax Relief program, developers of qualifying games would receive tax breaks of 25 percent.
The Association for UK Interactive Entertainment (UKIE), a trade body representing the country's game industry, said in a statement today that it plans to work with the U.K. government, the European Commission and the Independent Game Developers Association (TIGA), a separate industry association, to minimize the delay.
"We were prepared for this as it was always a possibility when establishing an entirely new European tax scheme, especially as games are so different to film and TV," said UKIE CEO Dr. Jo Twist. "We are confident of the government's commitment to implementing the tax breaks as soon as possible."
TIGA is similarly optimistic, according to a statement the organization released today.
"Although Games Tax Relief has not yet received State Aid clearance from the EU Commission, TIGA has been assured that the UK Government is committed to this Relief, will be legislating for this Relief in the Finance Bill and will deliver this Relief," said TIGA CEO Dr. Richard Wilson, calling the program "vitally important" in order for the British gaming industry to remain competitive on the worldwide playing field.
Earlier this week, TIGA officials said the U.K. game industry was growing after years of recession, and added that the anticipated tax relief program would help to stimulate further growth.
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