Lord Carter's Digital Britain document proposes that UK-developed Games that are quintessentially English could qualify as "culturally British" in order to get tax breaks from the government.
The move, which copies what is already in place in the movie industry, could mean that the gaming industry could keep a bigger portion of the £4 billion revenues it generated last year.
The government reckons that "A system of cultural tax credits has long helped to sustain a wide range of films that speak to a British narrative, rather than the cultural perspectives of Hollywood or multinational collaborations."
Tax breaks could give the United Kingdom the edge it needs to stay ahead of the competition. The South Koreans are just behind the Brits and the Canadian and the Americans are ahead of us and giving financial incentives might help.
However, delving into more details could make the procedure become incredibly complex. How to determine the degree of Britishness and the amount of tax break to be given?
Richard Wilson, the CEO of TIGA, the body which represents the Game Industry, was enthused by the news saying that “The Government has at last officially recognised that support by overseas governments for their games industries has put the UK development sector at a disadvantage”
He pointed out that unlike the previous version of the report which was published in January 2009, the final one does not ignore the important economic contribution that the gaming industry makes to the UK economy.
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It is important to make sure that the new tax break system is not only implemented quickly but also that it serves its purpose, i.e. fostering the UK gaming industry and gives it back its competitive edge. If the UK government fails to act quickly, this could lead to a massive skills shortage over the next few years.
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