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UK Video Game Tax Relief Cancelled
Stoobalou writes "UK game developers have just been dealt a financial blow by Chancellor George Osborne in his first budget, which sees the coalition government scrapping the video game tax relief plans promised by Labour. In his speech today, Osborne simply said the 'planned tax relief for the video games industry will be cancelled.' According to the government's budget report, the cancellation of video game tax relief will save the government £40 million in the 2011-2012 financial year, and a further £50 million in each subsequent year."
Actually, an indie game developer in the UK has said that this is not a huge deal (for him at least) because they lowered the business tax rate 1% instead, and this way he doesn't have to fill out any forms for his games business to get a boost.
This game will waste your life. Don't clicky!
The economy is bankrupting the UK. Fark puts it succinctly: "Facing a massive budget deficit, the UK to cut welfare, increase the VAT to 20 percent, and impose a new tax on anyone who brings one of those damn vuvuzelas back from the World Cup". Chancellor George Osborne is doing what all countries should do in that situation but are afraid to do, due to the unlikelihood of reelection. The country is damn near bankruptcy, the whole European continent is over-leveraged on debt and Britain is doing their best to make an example by balancing their budget. Tax handouts to the entertainment industry don't help balance the budget. Insert snarky comment about US legislators growing some balls and balancing our budget here...
Here's some more info on the subject:
moox. for a new generation.
They are cutting Corporation Tax, employer contributions to National Insurance and (if I read correctly) new start ups wont have to pay NI on the first ten employees they hire. So rather than provide a boost for that one industry, those breaks are helping out all industries, including the games industry. Makes sense to me.
Corporation tax is being dropped 1% every year from *25% (*current) down to 24% making it the lowest tax of its kind in the Western world.
Small businesses will also see a 1% drop in the rate of tax (between 300K-1.5M). Small businesses also have to start paying NI at a higher threshold, which means the first few employees are now much cheaper.
So, yes, this is a blow - but it might actually not hurt the small games industry at all and only hurt the big industry for a few years until we get down to that insane 24% corporation tax.
The point is actually to attract these billion dollar+ companies into the UK; which would obviously be a boost for the UK economy.
Maybe we should re-phrase the old adage - There's no such thing as a free market.
Um, I think you'll find the UK has a huge variety of traditionally made cheeses, above and beyond that of many continental countries.
I don't that's an issue here, more like it's part of UK Govt's plan to increase taxes to get rit of its debt.
If you post as an AC, don't expect me to spend a mod point on you.
Or maybe a nice piece of Wensleydale Gromett.
A list of some of the things the UK apparently hasn't produced in years, which is relevant to both the OP and your post: http://www.giantbomb.com/united-kingdom/95-492/list-of-video-games-made-in-uk/35-9288/
"the UK one is caused because the country hasn't actually produced anything in years"
Yeah, except the UK is still sitting at about the 5th to 7th largest economy in the world by manufacturing output and in the top 5 for service sector output. Contrary to popular belief, it's really only it's position in agriculture on the world stage that's declined.
That's quite an achievement for a country that hasn't produced anything in years.
No, Britain's problems were caused by it's reliance on the service sector in the face of the US' credit crisis in which it was deeply involved.
Britain doesn't have a problem with money or assets per-se, it has so many programs it could cancel (i.e. Trident) if push came to shove to pay it's debts, the issue is that the previous government over-extended public sector, such that we have more public sector expenditure than we can realistically afford. Britain's pain is merely going to have to be a scaling back of the public sector programs we have, coupled with higher taxes to pay for the rest of it- this isn't Britain's only option, because as I say, Britain has so many schemes and so much expenditure and so forth still that it could cut if it really needed to it's really not at much risk.
In contrast, countries like Greece don't have big things like nuclear weapons programs with money set aside for that they can cut now that it's hit crunch time. The same goes for Spain and so forth.
So effectively, like the US and France, whilst Britain doesn't have a lot of actual cash floating round, it does have a lot of expenditure planned, or assets to sell off should things get really bad.
In other words, Britain, like the US and France could solve it's financial situation tommorrow if the population was willing to accept the loss of some massively important albeit luxury programmes people have gotten used to having such as Trident, new aircraft carriers, child tax credits, free care for the elderly and that sort of thing. Of course, that wouldn't be pleasant for the people who depend on those schemes, which is why the government is trying to solve the debt problem a bit more slowly, and a bit more carefully.
Effectively, it has simply deemed that the UK video game industry tax relief is one of those small things that can be cut without the vast majority of the population actually giving a flying fuck, and without any real harm to the economy.
Conveniently the BBC have produced this tool that illustrates the rough point quite well:
http://news.bbc.co.uk/1/hi/business/10373060.stm
Try moving the welfare slider to see what I mean- in one fell swoop most the deficit could be eliminated, but the key is to do it with least impact on people possible.
Ed Vaisey, now the Creative Industries Minister in the Department of Culture Media and Sport was a keynote speaker, and actually took time out of election campaining to be there.
The general gist of what he was saying was that should the Conservatives get elected, then he would be pressing for tax breaks for UK game developers (he also claimed the idea of tax breaks was partly his idea, but that Labour had taken the credit).
Also, at a Playing The Game panel session (http://www.gamesindustry.biz/articles/industry-support-is-number-one-priority-vaizey), he claimed
You are competing against countries that are giving active fiscal support to the videogames industry, and I think it's a given that you have to put something in place to, quite frankly, level the playing field - so it is my absolutely number one priority, should we win the general election."
O rly?
http://www.phasiclabs.com/
Well you've pretty much summed it up, but I'll add that when it comes to having a big bloated public sector Greece and Spain (plus Belgium and France) are in an entirely different league. Jobs for life (many of which don't really need doing - just as well because they don't bother to do them anyway), early retirement with an index linked pension - and still they're on strike at the slightest excuse.
Right now I see the ferries to the Greek islands are blocked by a bunch of hooligans. So there's hundreds of tourists stuck on the docks, fuming and swearing they'll never go back there, when they should be in shops and taverns putting money into the local economy.
Do these morons think there's an endless pot of gold that the government is withholding from them just to be mean?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Because, of course, the French would *never* be biased against things English...
Yep, it did make me chuckle the other day when I saw the French were raising the retirement age to 62- poor sods, however will they cope?
Here in the UK though if you've seen the comments from the unions their attitude is no different- according to the unions in the UK we can't make cuts and we can't raise taxes. I'd love to know what planet the unions are on, I'd love to know where exactly they think we're going to find £150bn without cutting or raising taxes. That's a common trait amongst unions it seems though, they're often more than happy to whine and moan about everything, but they never actually offer any alternative solutions to the problems, just claim the solutions everyone else comes up with can't work.
I think it's a bit runnier than you'll like it, sir.
If you can read this, it means that I bothered to log in.
I think you completely missed the point.
Surviving on £30 a week less is better than the alternative of having the entire economy fail because if it did your £30 a week wouldn't be worth shit anyway.
I'm not saying we should decrease the state pension, I'm not saying that at all, I'm just pointing out that if we really reached crisis point it would be at least one option that would allow us to avoid complete and utter national meltdown.