Video games tax credit - delay and disappointment
Bad news for the video games tax credit. The proposed video games tax credit will be the subject of an in depth investigation by the EU Commission. You can see the EU press release here.This is not
Bad news for the video games tax credit. The proposed video games tax credit will be the subject of an in depth investigation by the EU Commission. You can see the EU press release here.
This is not good. At all.
I spoke to HMRC and they tell me the process is:
(a) HMRC have received a formal letter. This will be published in the next week or so, so we can all see it.
(b) HMRC are working on their reply. They've discussed what's going on with TIGA and UKIE who are fully aware of what's going on and are assisting HMRC.
(c) There will be an opportunity for third party comment.
(d) The process is likely to go on to the end of June at least before the EU Commission's first response is received. Whether the process drags on longer depends on what the EU Commission's response is.
What does this mean? Broadly for the time being there is no video games tax credit. Whether there will be one in due course is not known. Although the legislation in the Finance Bill will proceed through the parliamentary process, and on its terms applies from 1 April 2013, in practice it will not be possible for video games producers to get anything other than conditional responses to applications relating to the video games credit. It is possible that the legislation will need to be changed (or abandoned completely) before or after Royal Assent depending on the EU Commission's final position and when it becomes known. It's also possible that the EU Commission will insist that the video games tax credit can not apply to any expenditure incurred before its final decision is given (so that the current 1 April 2013 introduction date will have to be moved).
So we're in limbo on the video games relief.
This is not good. At all.
I spoke to HMRC and they tell me the process is:
(a) HMRC have received a formal letter. This will be published in the next week or so, so we can all see it.
(b) HMRC are working on their reply. They've discussed what's going on with TIGA and UKIE who are fully aware of what's going on and are assisting HMRC.
(c) There will be an opportunity for third party comment.
(d) The process is likely to go on to the end of June at least before the EU Commission's first response is received. Whether the process drags on longer depends on what the EU Commission's response is.
What does this mean? Broadly for the time being there is no video games tax credit. Whether there will be one in due course is not known. Although the legislation in the Finance Bill will proceed through the parliamentary process, and on its terms applies from 1 April 2013, in practice it will not be possible for video games producers to get anything other than conditional responses to applications relating to the video games credit. It is possible that the legislation will need to be changed (or abandoned completely) before or after Royal Assent depending on the EU Commission's final position and when it becomes known. It's also possible that the EU Commission will insist that the video games tax credit can not apply to any expenditure incurred before its final decision is given (so that the current 1 April 2013 introduction date will have to be moved).
So we're in limbo on the video games relief.