UK games industry trade body UKIE (the association for UK interactive entertainment) has responded to the government's draft proposals concerning the 'cultural test' businesses will have to pass in order to qualify for the proposed video games tax relief.

The government's initial draft is based on a similar test used for the UK film industry. In a coordinated response with fellow trade group TIGA, UKIE has emphasized the diversity and uniqueness of the games industry and suggested that this be recognized in the points-based test.

Under the film industry cultural test, productions must achieve a minimum score of 16 out of 31 in order to qualify for tax relief. Points are awarded for such things as the film being set in the UK, the lead characters being British or UK residents, and key production staff being British.

Dr Jo Twist, CEO of UKIE says: 'The cultural test is an important part of the system allowing tax credits to be put in place. UKIE's response outlines how we can have a rigorous test, meeting the needs of the EU state aid process, but a fair one that accurately reflects how games are made in the UK today and who makes them. We have also made recommendations that will help make sure that the test recognizes all parts of the games industry, from the traditional console and PC markets to the mobile and social games that have emerged in recent years.'

The main proposals set out by UKIE are:

• The cultural test should reflect that tax breaks need to be of real benefit to all parts of the games industry, from small independent studios and existing bigger studios to attracting inward investment from multinational companies.
• The games industry cultural test should be given an extra maximum point allocation (raising it from 30 points to 31 points), bringing it into line with the total number of points available in the UK film industry's cultural test.
• The test itself should accurately reflect the process of how games are made today in the UK, including recognising coding as an essential part of the creative and artistic skill-set involved in the crafting of interactive entertainment.
• Games will not always have a traditional narrative, describable setting, or characters of a recognisable species. UKIE therefore welcomes the government's proposal to recognize fictional settings and species.
• Four points should be allocated to games made in the English language (up from two), again bringing this in line with the UK's film industry cultural test.
• The test must recognise that, in smaller businesses, for example micro studios, one person will often do several key jobs and points should still be given for each of these roles.

Chancellor George Osborne confirmed a tax break scheme for the UK games industry in his budget speech in March. The system is to be introduced from April 2013.