Over the coming months, UKIE will be seeking to clarify the guidelines for the UK tax credits cultural test, according to CEO Jo Twist.
The exciting and brilliant news that the videogame industry will be getting tax breaks was met with cheers last week, but it was somewhat marred by the air of confusion that surrounded it, mostly in relation to the cultural test guidelines.
In order to qualify for tax credits, games must be culturally relevant, a criteria which can be proved by scoring 16 out of 31 points on the cultural test. That’s all fine and dandy, but problems arose when looking at the actual content of the test, and what it all meant.
The Department of Culture are unable to offer clarity on the issue, but will be issuing a response in the New Year, as any clarifications or changes to the guidelines would require approval from Europe first, as the cultural test is part of their stipulations for state aid.
UKIE CEO Jo Twist, who was involved in the consultation process that led to the first draft of tax credit legislation, was happy with the overall test, but did acknowledge the need for clarification.
“We talked to games businesses of all shapes and sizes about the cultural test and as a result asked for government to consider a number of new elements that would help make the test apply to as wide a section of the games industry as possible,” said Twist. “Many of our recommendations such as giving the games test an extra point overall and recognising that games are sometimes set in abstract or undetermined locations, seem to have been accepted and we welcome this.
“However, many of the questions remain open to interpretation and we shall be working with government over the coming months to seek clarity on how each section can be answered and how it applies to as many games as possible.”
Twist, too, is unable to offer that clarity at this moment in time. One particular phrase that was a sticking point was what counted as an ‘undetermined location’, with Twist saying it would cover any fantasy and abstract locations – providing Tetris as an example that would count as ‘undetermined location’ – but she could not clarify if historical or extraterrestrial locations would count as fantasy or abstract.
Another aspect of the test that was unclear was whether or not a single individual would be able to claim points for every single job role – something that is common when you’ve got a small development studio made up of just one or two people.
UKIE pushed hard for that to be recognised in the initial consultations, and Twist believes it is the case, even if the guidelines don’t lay it out clearly enough: “This was one of our recommendations, as this was vital in making the test work for smaller studios and we believe that a single individual can claim points for each of the roles in section 6.”
Other things that Twist will be seeking clarification for include how a game’s story will be deemed ‘British’, and if written dialogue in the English language (or a common regional dialect) will score points in the section that currently only makes reference to ‘recorded’ dialogue. Even without clarification, it’ll be a panel of experts who judge each individual game, meaning the nuances of our medium should be given fair acknowledgment when held up against the test.
“We now need to drive into the detail and get clarity on how each question can be answered,” said Twist. “Guidelines will then need to be produced so that games businesses can be as clear as possible over what will and will not qualify. We very clearly called for the team that administers the test to have expertise in games and that they should be there to help businesses to qualify and not hinder them.”
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