New UK Government Budget Nixes Game Developer Tax Breaks

Despite past promises, the UK Government has quashed plans to offer tax breaks to the region's game developers. Citing wider economic stress, Chancellor George Osbourne has pulled the tax breaks from his Emergency Budget. A commitment to introduce game developer tax breaks was made earlier this year by the Labour party and echoed by the Conservatives. The news that Conservative MP Ed Vaizey had become Culture Minister, and was a vocal supporter of the industry and the tax relief that would bolster it, seemed to point to a place in the budget for the region's developers. Vaizey had specifically stated tax breaks for game developers would be introduced "in the Conservatives' first budget" if they were brought to power -- and the current UK government was formed as a coalition between the Conservatives and Liberal Democrats. But UK trade site Develop reports today that Chancellor Osborne said Vaizey is on board with the decision not to address tax breaks in the current budget, despite his past statements. At the same time, Vaizey is slated to speak at the related Develop Conference in the UK this summer. At issue, according to the report, would appear to be the specific focus on one industry -- tax breaks for game developers, said Osborne, are 'poorly targeted', and instead the wider-ranging budget made reductions to the corporations tax and implemented cuts in National Insurance. This means that the UK video game industry is again at a disadvantage against other countries that offer significant tax breaks for developers and publishers who set up -- in particular Canada, which has seen major expansion in Montreal and other regions in recent years.