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Devs cheer as Osborne okays game coding tax relief

Level of relief TBD

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Budget Day 2012 Chancellor George Osborne has heeded calls from the videogame industry and agreed to provide it with tax breaks.

Announced in today's Budget, the scheme will commence in April 2013, giving time for civil servants and stakeholders to thrash out the details - "subject to State Aid approval and following consultation", as Mandarin-speak puts it.

That said, the Treasury estimates the relief, which will also apply to animation companies, will cost the Exchequer £15m in the 2013-2014 tax year, rising to £35m in 2014-2015.

Videogame industry organisations such as Tiga, which represents developers, believe that cost will be more than balanced by extra tax revenue generated by UK publishers who would otherwise send development work overseas to countries already offering generous tax breaks to games coders.

"Our research shows that games tax relief should generate and safeguard 4661 direct and indirect jobs [and] generate £172m in new and protected tax receipts," Tiga's CEO, Richard Wilson, said after the annoucement was made.

Tiga and others have been lobbying for videogame development tax breaks for years. The development 'brain drain' has become much worse as companies have migrated to nations - Canada, France and Korea most notably - offering such incentives.

Labour Chancellor Alistair Darling finally took issue sufficiently seriously to "offer help to the computer games sector similar to the steps which are helping restore the fortunes of the British film industry", a pledge made during his March 2010 budget.

Three months later, the incoming coalition government scrapped the plan in Osborne's first, austerity budget. ®

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