Detail of outcome
The Cultural Test (Video Games) Regulations came into force on 19th August 2014, introducing a points-based cultural test for video games in connection with the UK’s tax relief for video games development.
The video games tax relief was given EU state aid approval in March 2014 and is available for qualifying expenditure from 1 April 2014. In order to be eligible for the tax relief, video games must pass the cultural test and be awarded British certification. The certification is carried out on behalf of Government by the BFI who process applications. The BFI have published a summary of the cultural test and Guidance Notes for applicants and they can be found on the BFI website.
In the March 2012 Budget, the Chancellor of the Exchequer announced that the Government will introduce corporation tax reliefs for Animation, High-end television and Video games industries from April 2012, subject to State Aid approval from the European Commission, and following consultation on design. HM Treasury’s consultation on proposals setting out these tax reliefs closed on 10th September 2012.
This Department for Culture, Media and Sport (DCMS) consultation paper separately seeks views on a proposed test to identify culturally British video games that might be considered eligible for the new tax relief. This requirement is in line with the European Commission’s rules on State Aid. The final design of the cultural test for animation will therefore be dependent upon input from both this consultation and the European Commission.