UK budget hits games industry hard, includes VAT rise

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The coalition Government have announced the details of their “Emergency” budget, and it makes for grim news for anyone in the UK games industry.

The planned tax relief for games companies has been scrapped by chancellor George Osbourne, which would have given a little breathing space for the faltering industry.

A massive rise in VAT from 17.5% to 20% will also land next January, which will hit electronics consumers very hard. VAT is calculated from a product’s value, and with electronics normally being significant investment, it’ll be a very notable rise when you head into Currys next year.

The 50p tax on landlines has also been cut, which will be a further blow for anyone hoping to see an improvement in the UK’s broadband internet infrastructure.

Tough cuts were expected, but perhaps not the high number that affect the world of technology.

Gerald Lynch
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3 comments

  • George, you are right, basically noone will see the rise unless they are spending in the 10s of thousands, for most us, we wont notice.

  • “A massive rise in VAT from 17.5% to 20%”, “it’ll be a very notable rise when you head into Currys next year.” This rise will be just over a tenner for every £500 of spending at the current rate of tax. Noticable, but just barely. Is it really going to change spending behaviour so much?

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