"among the most generous in the world", as he delivers his autumn statement.
Osborne proposed a 25% rate of production tax relief for UK game development, a share of £6m in skills funds, UKTI funding up by 25% and corporate tax reduced to 21% by 2014.
The UK trades body for game development has called the autumn statement from the government a "timely and favourable step to foster continued industry growth."
"Following consultation on their design, the government will ensure that the reliefs are among the most generous in the world by offering a payable tax credit for all three reliefs worth 25 per cent of qualifying expenditure," said the official statement from UK treasury. Animation and television production are included in the tax reliefs bound for April 2013.
There'll also be £6 million more pumped into the Skills Investment Fund that's handled by the Creative Skillset administration over the course of the next two years, which will be adding video games to their remit. This means the UK government will match what the industry contributes by up to £6 million.
There's also to be a reduction in main corporate taxation rate, taking it down to 21%, better broadband connectivity throughout the UK and £600 million invested in science research spending.
"Tax breaks for games production will ensure that the UK remains a world leader in the high technology video games development industry. A single 25 per cent level of relief will be simple to administer and economically impactful. Yet we will have to monitor the actions of our competitors: the province of Quebec in Canada already boasts a 37.5 per cent level of tax relief," said TIGA's Dr Richard Wilson. They hope more high skill, export industries likes the games industry will continue to play a larger role in the UK economy.
"This first detail of the tax relief seems a positive step for our members and the wider industry. Whilst we called for a 30% rate of relief for the scheme, Ukie was nonetheless pleased to see the rate set at 25%, giving the games sector parity with other UK creative industries," said UKIE CEO, Dr Jo Twist.
“As soon as the full draft legislation is published we’ll be poring over the finer details to ensure that the fine tuning and implementation of the proposal is fully in line with the needs of our industry.”
“We’re also delighted that the Chancellor has recognised the need to ensure the long term future of the UK games industry by introducing a skills fund that the games sector can access. We’ll be working with Government and Creative Skillset to make sure that this extra element adds real value to UK games businesses,” they continued.
“It was also great to hear that UKTI will be receiving more funding as we are planning a major campaign next year to promote UK games companies to global markets and will be working with government to deliver this.”
Eidos life president and UKIE vice chairman, Ian Livingstone, added: "The government’s understanding of the importance of the games industry has increased dramatically in recent years. Tax relief for games production combined with computer science on the national curriculum are major boosts for the industry."
"Today’s announcement of additional skills funding is more positive news, and a welcome sign of the games industry being seen as having the potential to be a leading growth industry to help drive the digital economy of the UK in the 21st century.”
UKIE chairman Andy Payne called the move by the chancellor "great and long overdue news." The UK games industry has long complained about how much they contribute to the British economy and yet received little to no recognition, while overseas territories like those in Canada seize the day and offer very lucrative environments for game studios.
UKIE is chuffed to bits right now.