UK Chancellor of the Exchequer, George Osborne, has just sat down after speaking for an hour to deliver the coalition Government's 'Emergency Budget' to a crowded and noisy House of Commons - and it's not good news for the games industry.
Of interest to those in the IT industry in general are the following announcements:
The proposed video games industry tax relief announced by the previous Chancellor earlier in the year, and worth an estimated £1 billion a year to games developers, has been abolished.
The landline levy which was also proposed in that same previous budget, estimated to cost every household £6 per year for every telephone line they have in order to fund superfast broadband development in the UK, has also been abolished.
Finally, the rate of VAT (Value Added Tax) will increase on 4th January 2001 from 17.5 percent to 20 percent. This will inevitably impact upon all business, and the IT sector is no exception with an additional 2.5 percent to be added to the cost hardware and services.
Barry Murphy, UK technology leader at PricewaterhouseCoopers LLP, said:
"Today's announcement to withdraw from introducing any relief for the video game industry will hit many businesses, but is not unexpected given the fiscal crisis and much of the economic commentary on the role of such incentives. The lower corporate tax rates and some of the employment tax reductions will help the sector, but the competition for global talent and investment will remain fierce".