The European Commission’s decision to launch an in-depth investigation into video games tax relief is “disappointing”, according to the industry's trade body.
The 25% tax relief on a maximum of 80% of the production budget of a qualifying video game for expenditure on goods and services used in the UK was first announced as part of a raft of tax breaks for creative industries in the March 2012 Budget, and put forward after consultation in the 2013 Finance Bill draft clauses.
The tax break was due to come into effect on 1 April, but the EU Commission announced last week it would investigate the relief.
A similar video games tax relief scheme in France and the UK’s film tax relief were both subject to commission investigations before they were introduced.
According to the commission, there was no “obvious” market failure in the creation of British video games. The industry remains a “dynamic and growing sector” that did not merit taxpayer subsidy, the Eurocrats argued.
The UK video game trade association TIGA did not agree, however...