Ukie responds to announcement of European Commission tax breaks investigation

16 April 2013 - London, United Kingdom – British games and interactive entertainment trade body Ukie extremely disappointed with decision to investigate proposed UK production tax credit scheme but still confident of getting scheme implemented.

Ukie has responded to today’s announcement from the European Commission (EC) that the EC will be undertaking an in-depth investigation into the proposed production tax credit scheme for UK games and interactive entertainment businesses.

This means that the EC have some specific questions that they need answering which the UK Government responds to. This is common practice throughout the rest of the EU, and the film industry was subject to a full investigation when the plans for their tax credits were first submitted to the Commission.

The Commission is questioning whether there is an obvious market failure in the UK games industry. In particular they are looking at whether:

  • aid is necessary to stimulate the production of such games;
  • limiting expenditure for the tax relief to goods or services 'used or consumed' in the UK would be discriminatory;
  • offering this type of aid would fuel a subsidy race between Member States; and
  • the proposed cultural test ensures that the aid supports only games with cultural content without leading to undue distortions of competition.

Commenting on the announcement Ukie CEO, Dr Jo Twist said: “We are extremely disappointed that the European Commission has decided to open an in-depth investigation into production tax credits for the UK games industry. We believe this support is crucial in opening up the opportunity for developers to make culturally British games, but also as a vital incentive for development studios and large multinationals to base their development in the UK and nurture the talent here. We are still confident of having the scheme introduced and are fully committed to having it in place as soon as possible.”

”A similar investigation into the French games tax relief system was successful but this took 12 months to conclude.”

“The UK games industry needs tax breaks in place in order to be able to compete with other territories and to be able to grow to its full potential. One of the key questions that the Commission is asking is whether there is an obvious market failure in the UK games industry. We shall be gathering evidence to show that British games, being created by British games businesses, are not being made in significant enough numbers for the UK industry to compete globally.”

“It is vital that games businesses help to supply evidence as part of this investigation. We will be reaching out to all games businesses and working with TIGA to make sure that the industry speaks with one voice on this crucial issue.”

“We are in constant dialogue with UK Government and know that they remain 100% committed to the introduction of the reliefs and shall be working together to respond to the Commission’s questions.”

Andy Payne Chairman of Mastertronic and CEO of AppyNation also commented, saying: “Running a games developer in the UK, this news is incredibly disappointing to me. Tax breaks will be a vital component in allowing the UK games industry to compete on a level playing field and helping it to once again grow to its full potential. We must all work together to make sure that this situation is resolved as quickly as possible for the sake of the UK games development sector.”

-ENDS -

Contacts:
For all press enquiries, please contact the Ukie press office on T: +44 (0)20 7534 0580 or E: press@ukie.org.uk
 
About Ukie
The Association for United Kingdom Interactive Entertainment or Ukie (pronounced YOU-KEY) is a trade body that aims to support, grow and promote the whole of the UK’s games and interactive entertainment industry. Founded in 2010 (although formerly known as ELSPA), Ukie’s membership includes all the major UK and global games publishers and the best of UK development talent - from promising start-ups to some of the biggest, most successful studios operating in the UK today.
 
We also have distributors, academic institutions, new publishers, and media outlets that are integral to the lifeblood of the industry as part of the family.
 
Ukie works with government to champion a range of issues including age ratings, education and skills, access to finance and protecting intellectual property rights. It also works with the media to ensure true and accurate representation of the sector by raising awareness of the industry’s positive economic contribution and the societal benefits of gaming to policy makers, regulators and consumers.
 
One of Ukie’s key roles is to support its members by providing them with key market information, promoting careers and offering the business support services, training and best-practice knowledge to enable them to operate most effectively.
 
We also offer a comprehensive events programme to give the games industry access to key information, leading industry figures and give everyone the chance to network. You can see our events programme here http://ukie.org.uk/events
 
In addition, Ukie compiles weekly, monthly and annual retail charts and sales reports for the UK market.
 
Twitter: @uk_ie
Facebook: Ukie