UK developers finally getting tax breaks, provided they pass a cultural test

The UK games industry is now finally eligible for tax breaks, after the European Commission approved the long-delayed draft legislation for cultural tax relief.

The tax relief will come into effect for UK developers at the start of April. The move finally comes after years of setbacks, delays, and ongoing campaigning for the tax breaks, with the legislation originally outlined by the UK's outgoing Labour government way back in 2010.

To qualify for the tax breaks, games need to fulfil three criteria: that they are intended for public release, that at least 25 percent of the core expenditure comes from the UK, and that they pass a cultural test so that they can "promote the sustainable production of culturally significant video games in the UK."

While there's a suggestion that games can feature UK-based characters or settings to be eligible--Captain Price eating a pasty in Cornwall for the next Call of Duty game, perhaps?--the criteria can also be satisfied by the amount of development work taking place in the UK and whether the game's lead developers are UK citizens.

"This is a huge boost to the UK games and interactive entertainment sector and the start of a great new era of games production in the UK," said Jo Twist, CEO of trade body UKIE and avid campaigner for the tax relief.

"We are delighted the European Commission recognised the clear market failure for the production of games with a British and European flavour, using UK-based creative and highly skilled talent."

Major developers in the UK include Lionhead, Rare, Rockstar North, Rocksteady, and Codemasters.