EU Commission Launching Investigation Over “Doubts” About UK Games Tax Relief

Today the UK games industry got some bad news in the form of postponed tax breaks for the industry. The EU Commission has decided to launch an “in-depth investigation” as to whether the cuts are needed as doubts were raised over them being needed at all.

The 25 percent tax relief on a maximum of 80 per cent of the production budget cost plans were put on hold as there “is no obvious market failure”. The EU commission believes that the UK games industry is not in a position that requires any kind of support.

“The market for developing video games is dynamic and commercially promising,” said Joaquin Almunia, Commission VP. “It is not clear whether the taxpayer should be subsidising this activity.”

This is a blow for the UK games industry, especially to trade groups UKIE and TIGA who have campaigned for these cuts for a number of years. Both groups have exclaimed their disappointment at this choice and have re-affirmed their support for future tax cuts.

UKIE CEO Dr. Jo Twist had this to say “We are still confident of having the scheme introduced and are fully committed to having it in place as soon as possible. A similar investigation into the French games tax relief system was successful but this took 12 months to conclude.”

Hopefully the EU Commission will change their minds as time goes on.

What do you feel about this decision? Tell us below in the comments.