Computer games industry welcomes tax breaks

The Chancellor said he would offer help to the sector similar to the aid given to the British film industry, subject to state aid clearance from the European Commission.

The games industry in Yorkshire, which is worth about 100m – 10 per cent of the UK's 1bn industry – is bucking the economic downturn

There are 28 games companies in the region, employing more than 500 people.

Jamie Sefton, sector manager at Game Republic, which supports video games development in the region, welcomed the move.

"Yorkshire has got three of the top 100 games companies and it is a growing industry. The fact that we have got these tax breaks is fantastic because it will create a level playing field with countries like Canada and France."

He added: "Hopefully, more companies will be encouraged to start up in the UK and in particular Yorkshire.

"For existing companies there will be more money for development and new intellectual property."

Charles Cecil, managing director of games developer Revolution Software, based in York, said politicians had finally realised the strength of the sector.

"Tax breaks are something we have been lobbying for for quite some time with little interest from politicians," he said.

"The Government has now realised it is a very valuable industry. We were the third largest developer of video games in the world until recently.

"It's advantageous for us to produce cheaper games and get them cheaply on the world market." Stewart Gilray, managing director of Otley-based games developer Just Add Water, added: "For small companies such as ourselves who do relatively large projects it can only be good for us."

Stuart Cottee, head of tax at Deloitte's Leeds office, said talented UK games professionals were at the heart of the global industry and key to the financial success of many internationally renowned games companies both in the UK and abroad.

He added: "This move recognises the economic and cultural contribution made by the games industry which is set to be the driving force of media in the 21st century. Helping the UK games industry will help the UK retain talent and create more original content and technical innovations."