Budget offers tax relief for UK videogames industry (Wired UK)

To illustrate its commitment to make the UK the "technology hub of Europe", the government has announced a series of initiatives including corporate tax reliefs for the videogames, animation and high-end TV industries.

The plans to introduce corporation tax reliefs from April 2013 for these high-tech industries were revealed in this year's Budget. The tax breaks have been welcomed by videogames trade body Tiga, which has lobbied for them for six years.

Chancellor George Osborne said in his statement: "The film tax credit, protected in our spending review, helped generate over ?1 billion of film production investment in the UK last year alone." He added that the new tax break would help stop premium British TV programmes such as Birdsong being made abroad, attract top international investors and support "our brilliant video games and animation industries" too.

Sue Crawford, partner and head of the Tax group at Wiggin LLP, said: "The Chancellor's announcement for tax relief for the UK video games industry is most welcome. The UK has slipped from 3rd to 6th place in this sector in the last five years as other countries, [such as] Canada, France and Korea, have surged forward, propped up as they are by tax credits. This relief will prevent the brain drain and downturn in staff recruitment for the UK's games industry and help bolster recruitment for the bright young design and technology students that are leaving our universities jobless."

The exact details of the tax breaks will most likely be revealed in the Finance Bill which is published on Thursday 29 March.

The government also announced that it has selected Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, London, Manchester and Newcastle as its super-connected cities as part of a ?100 million investment announced during the Autumn Statement. An additional ?50 million has been set aside to fund a second wave of ten smaller "super-connected"cities.

Some ?60 million will be used to establish a UK centre of aerodynamics which will support innovation in aerospace technology and a new ?100 million fund will be used to support investment in university research facilities, opening for bids this year. It will attract additional co-investment from the private sector.

The government will also set up two Catapult Centres -- one for transport and one for future cities -- by 2013. These aim to bring together universities with IT companies and SMEs to commercialise technologies more quickly. There are also plans to reform the Enterprise Management Incentive scheme, which helps SMEs recruit and retain talent, by providing additional support to help startups access the scheme by doubling the individual grant limit to ?250,000.

All government information will be published on a single gov.uk domain by the end of 2012 and will move to a "digital by default" approach to its transactional services by 2015. This is something that was promised at the launch of the Government Digital Service in December 2011.

Outside of the tech sector, corporation tax will be cut from next month by one percentage point to 24 percent, falling to 22 percent in 2014, something that should help drive investment to the UK.

Chancellor George Osborne announced cuts to the top rate of income tax from 50p to 45p on the pound and an increase in the basic personal tax allowance from ?7,475 to ?9,205. Meanwhile child benefits will be cut from families where households are earning more than ?50,000. Perhaps the least popular announcement has been the decision to scrap income tax breaks for the over-65s. Thanks to inflation, more than four million people will be ?83 worse off by 2014, while 360,000 pensioners will lose ?285 per year.

You can read the full Budget document here.

Source: http://www.wired.co.uk/news/archive/2012-03/21/budget-promises-tax-breaks-for-videogames-companies

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