British game developer tax breaks delayed again

The oft promised tax breaks for British game developers have been delayed once again, this time because the European Commission has announced its intention to perform a full scale investigation into the scheme, suggesting that too hefty a tax cut, could give UK devs. too much an advantage over European competitors.

The EU Commission went on to suggest that ultimately this would lead to other countries offering tax breaks and that across the whole of Europe, we'd see mass publicly subsidised game development. Is the European Commission aware that these sorts of things happen everywhere else in the world? Try importing cars into Brazil and selling them. It's practically impossible. No one's suggesting the tax breaks have to go that far, but is it so wrong for governments to give their own local produce a little helping hand?

“The market for developing video games is dynamic and commercially promising,” said Joaquin Almunia, European Commission vice-president (via GamesIndustry). “It is not clear whether the taxpayer should be subsidising this activity. Such subsidies could even distort competition.”

He went on to suggest that a market failure would be the only reason to implement such measures, something he argues has yet to take place.

“Tax break this!”
UKIE boss Jo Twist understandably, wasn't happen: “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,” she said.

“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.”

So now that the investigation has begun, it's not known whether the tax breaks, one of the plus points of last year's budget, will come in to effect at all, let alone when that will – if they do.

KitGuru Says: Shame this one. It would have been nice to see British developers given a bit of a leg up. How do you guys feel about EU involvement in this type of thing?

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