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UK games tax relief delayed

Pending European Commission approval of the cultural test

The introduction of tax relief for UK game development studios has been delayed.

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As part of today's 2013 budget, the UK government said the implementation of the video games tax relief has been held up as it awaits European Commission approval of the cultural test required under European law - studios will only be able to take advantage of the state aid providing their projects meet certain requirements.

UK trade body UKIE said it was "disappointed" by the announcement but remained confident of the government's commitment to tax breaks.

CEO Jo Twist said: "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.

"We are confident of the government's commitment to implementing the tax breaks as soon as possible. But we hope that the delay will be a short one and shall now be doing everything that we can, working with UK government, the European Commission and TIGA, to get the state aid approval that we need as soon as possible. They absolutely will still happen."

UKIE also said it was pleased by other measures outlined in the budget, including a further £10 million increase of skills funding to be made available to the creative industries over the next two years. It adds to the £6 million skills funding pot for film, animation, games and high end TV that was announced last November (of which £1.5m had been made available to the games industry).

Earlier this week, UK games industry trade association TIGA published research indicating that employment in the development sector grew by four per cent in 2012, bringing a halt to three years of declines. It also said investment in the industry rose last year, with the advent of industry tax relief "already stimulating growth".

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