Osborne Scraps Videogame Tax Relief

22 Jun 2010 at 14:14:52 by

Chancellor of the Exchequer George Osborne, has announced there will be no tax relief for the games industry.

In the latest budget report Osborne said the tax breaks proposed were "poorly planned" and that the government will not introduce any tax breaks for the industry.

This is a complete U-turn from both the Tory and Lib Dems message in their run-up campaigns to the election, and contradicts MP Ed Vaizey's message of support for the industry and deputy PM Nick Clegg's message of providing relief as soon as possible.

Last year, as shadow minister for Culture, Media and Sport, Vaizey told IncGamers there needed to be more transparency in the way the industry was working, and he criticised the various trade bodies in the industry. Equally Nick Clegg also announced his support for tax breaks and promised to champion the cause.

Since then an all-party parliamentary group, spearheaded by TIGA, has been formed to try to represent the interests of developers in parliament.

Issues surrounding tax breaks have been dominating the news over the last year, and it seems the Torys have decided the breaks will cost the economy too much at the present time.

"Obviously this is a real shame, other countries will still be offering tax breaks, and we're already heavily targeted by other countries so this is going to hurt [our UK based] industry," said Dave Jones, founder of Realtime Worlds.

It's not the tax breaks so much as it is investment, Jones told IncGamers, stating that it's hard for companies to compete for investment when there are other countries and developers that can offer a more efficient business solution.

Friend of IncGamers and CEO of TIGA, Dr. Richard Wilson said he was disappointed and angry with the announcement.

"This is a complete betrayal from the government who'd promised that video game tax relief would be announced in the first budget," he said.

"This is a big mistake fro the government and the industry is going to lose millions of pounds as a result, meaning it won't progress. We have to have specific measures to help the industry," said Wilson.

Wilson said TIGA wouldn't "give up" and that despite being extremely disappointed, it had already made incredible progress over the last year.

"We'll always suffer set backs, and this is just another set back, but it's not the end of the game."

We've been trying to get a hold of Ed Vaizey all morning, and as soon as we do we'll grill him and serve him up for you. In the meantime check out what he said to us before about the games industry, tax breaks and moving the industry forward.

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