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UK government reveals video games cultural test requirement for tax relief

Tuesday, 11th December 2012 14:57 GMT By Stephany Nunneley

The UK government has released a list of criteria game developers will need to meet in order qualify for tax relief, via a cultural test attached to a legislation draft submitted today.

Games developed in the UK will earn points awarded on factors ranging from whether it contains a British storyline, to where the game takes place and where it was created.

How the game contributes to British culture will also be a factor.

The tax break, outlined by Chancellor George Osborne last week, will offer a payable tax credit worth up to 25% of qualifying expenditure, and is to be introduced in April 2013 with a relief schedule of £15 million divvied out in 2013-14, and £35 million in 2014-15.

Back in October, UKIE provided a list of guidelines to the British Government, suggesting ways in which it could assess the cultural relevance of games when developers and publishers applied for tax relief.

The Cultural Test is posted in full below, courtesy of Develop. Thanks, CVG.

(1) A video game may be certified as a British video game under section 1217CB(1) of the Act only if it passes the following cultural test.

(2) A video game passes the cultural test if it is awarded at least 16 points in total under paragraphs (3) to (6).

(3) Up to 16 points shall be awarded in respect of the content of the video game as follows—

(A) Up to 4 points depending on the percentage of the video game that is set in the following locations

(i) 4 points if at least 75% is set in the United Kingdom or another EEA state;
(ii) 3 points if at least 66% is set in the United Kingdom or another EEA state or set in an undetermined location;
(iii) 2 points if at least 50% is set in the United Kingdom or another EEA state or set in an undetermined location;
(iv) 1 point if at least 25% is set in the United Kingdom or another EEA state or set in an undetermined location;

(B) Up to 4 points depending on the number of the characters depicted in the video game with the following characteristics

(i) if there are more than three characters depicted in the video game, 4 points if two or three of the three lead characters are from the United Kingdom or another EEA state or from an undetermined location or, if only one of the three lead characters is from the United Kingdom or another EEA state or from an undetermined location, 2 points if that character is the first or second lead, 1 point if that character is the third lead;
(ii) if there are only three characters depicted in the video game, 4 points if two or three of them are from the United Kingdom or another EEA state or from an undetermined location or, if only one of them is from the United Kingdom or another EEA state or from an undetermined location, 2 points if that character is the first or second lead, 1 point if that character is the third lead;
(iii) if there are only two characters depicted in the video game, 4 points if both of them are from the United Kingdom or another EEA state or from an undetermined location, 2 points if one of them is;
(iv) if there is only one character depicted in the video game, 4 points if that character is from the United Kingdom or another EEA state or from an undetermined location;

(C) 4 points if the video game depicts a British story or a story which relates to an EEA state;

(D) up to 4 points depending on the percentage of the original dialogue that is recorded in the English language or in a recognised regional or minority language as follows

(i) 4 points for at least 75%; (ii) 3 points for at least 66%; (iii) 2 points for at least 50%;
(iv) 1 point for at least 25%.
(4) Up to 4 points may be awarded in respect of the contribution of the video game to the promotion, development and enhancement of British culture.

(5) Up to 3 points shall be awarded in respect of work carried out in the making of the video game as follows

(a) 2 points if at least 50% of the work carried out on any of the following is carried out in the United Kingdom

(i) conceptual development; (ii) layout and storyboarding;
(iii) programming;
(iv) visual design;
(b) 1 point if at least 50% of the work carried out on any of the following is carried out in the United Kingdom
(i) performing and recording the music score created for the video game;
(ii) voice recording;
(iii) audio production;
(iv) picture production.

(6) Up to 8 points shall be awarded in respect of the personnel involved in the making of the video game as follows

(a) 1 point if the project leader (or, if there is more than one, the main project leader) is a qualifying person;
(b) 1 point if at least one of the scriptwriters (or, if there are more than three, one of the three lead scriptwriters) is a qualifying person;
(c) 1 point if the composer (or, if there is more than one, the lead composer) is a qualifying person;
(d) 1 point if the artist (or, if there is more than one, the lead artist) is a qualifying person;
(e) 1 point if the programmer (or, if there is more than one, the lead programmer) is a qualifying person;
(f) 1 point if the designer (or, if there is more than one, the lead designer) is a qualifying person;
(g) 1 point if at least one of the heads of department is a qualifying person;
(h) 1 point if at least 50% of the development team are qualifying persons.

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11 Comments

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  1. Eregol

    Well, 1 step forward, 2 steps back. Flaming idiots.

    #1 2 years ago
  2. ZeGerman1942

    I actually think these are some great rules. With quite a few points available, it should be easy enough to get 16 points and qualify. Companies want tax credits, then having some standards in order to get them is fair enough i think. Otherwise large companies could set up a small studio in the UK, list it as the head office and develop everything in cheaper countries. These guidelines can help revive the UK games development sector.

    The points from production alone should be easy to achieve. and don’t forget that the EEA has over 30 members i think, so characters, story, setting can be very varied.

    Even thinking Modern Warfare 3 for example, you got some british main characters, some of the levels are set in the the UK/EEA etc. so even that title would right off the bat get a handful of points. If it was developed in the UK then it would easily reach 16 i’d think.

    #2 2 years ago
  3. freedoms_stain

    AHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

    *pause for breath*

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

    Imagine Canada used the same set of retarded rules. Mass Effect would be really fucking different eh? What with at least 25% of the game taking place In Canada and all the main characters being super obviously Canadian. “Sorry there Mr Geth”.

    #3 2 years ago
  4. ZeGerman1942

    @3 that’s 4 points for setting.

    If you use Canadian voice actors etc., a canadian development team make the main characters canadian (or North American to be equivalent to the UK AND EEA rule) then you could still fullfil the 16 point requirement to get tax relief. Shepard, Anderson, Hacket, Joker, Chakwa(sp) and many other main characters already are (or could be) north american.

    Also at least for ME3, part of the setting could have been in canada or north america (instead of london) and you get a point from that too.

    Obviously there are restrictions but is that necessarily worse than handing out tax money for free – how long is that feasible?

    #4 2 years ago
  5. freedoms_stain

    @4, we’re talking about a country that allows billions in corporate tax avoidance, giving the video games industry a leg up is a drop in that ocean.

    The point of offering a particular industry a tax rebate is that in the long run it will generate more revenue than what was given up in the rebate anyway. So potentially it’s not only feasible, it’s profitable.

    Now tying a bunch of retarded ‘British’ rules to the program that have the potential to put a heavy limit on the mass appeal of your games, that’s not very feasible.

    Under these rules a game in a fantasy setting could not qualify for this tax scheme even if it was a 100% British production. That’s dumb. Mass Effect could not qualify if the Canadians used these rules.

    #5 2 years ago
  6. ZeGerman1942

    @5 do the math on the rules.

    If the entire production team is british or an EEA state member, if the game is done in the english language (which is pretty much a default anyway) and if it is produced in the UK then you already have 15 points. You need 1 point from the rest – make your main character(s) british or from an EEA member state and you are done.

    That way you can make a fantasy game or sci fi game or any game and still get the tax advantage.

    Honestly comparing Canada and the UK is quite hard to do. When the canadian tax breaks were set up the entire world economy was different, it was done to revive certain regions (not all regions in canada have tax benefits). If you believe some reports over the years, these regions, while seeing short term increase in business and a revived community, have not figured out the long term effect yet – some of the companies are registered outside of canada, so not all earnings are taxed in canada (i.e. your “it flows back in” argument is not always valid).

    Setting tax breaks up in the UK now, after a recession and in a country that has a lot more issues to deal with, is not as easy i would say. The government has to justify giving an industry any kind of tax break and that’s what these rules are for – and i for one think they are ok, and not too binding. And it’s better to get some tax breaks than none at all no?

    #6 2 years ago
  7. freedoms_stain

    @7, if you set your game in a Fantasy world then you can’t set it in the UK or have British characters. You cannot make up that point.

    #7 2 years ago
  8. fps_d0minat0r

    Lol so now developers have to play this game before they actually start making their game?
    if the developers made a game that met the points criteria, they would probably lose more money than they can gain from not paying tax.
    they might as well pay the tax and tell the government… ‘sorry, theres better places to set games in than the UK and development should be multi-cultural.’

    wont be surprised if more UK developers close and move to places where the company pays less tax, the staff pay less tax and their creativity is not limited by some bullshit points system to save some tax.

    …so much for tax doesnt have to be taxing.

    #8 2 years ago
  9. Cobra951

    Uh oh . . . So much for that.

    #9 2 years ago
  10. DSB

    Wow, talk about idiot politicians.

    Looks like they aren’t that hungry for high tech jobs. Oh well, the internet is just a fad.

    And what on earth does the british public get out of those requirements, except a pointless, petty little fix of nationalism?

    Pip pip cheerio, lads.

    #10 2 years ago
  11. Digital Bamboo

    This is so…sad? funny? strange? I don’t even know, it kind of hurt my brain a little bit to read that much bullshit.

    This point system is truly incredible. So, under this system, a game based on, say, Jack the Ripper murdering prostitutes, would be awarded full points, whereas a game like Valkyria Chronicles–with it’s anti-war messages–wouldn’t make the cut, because it clearly takes place in a fictional world, nothing like Europe at all. Genius.

    #11 2 years ago