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1133

 

House of Commons

 
 

Monday 8 November 2010

 

Consideration of Bill

 

Finance (No. 2) Bill, As Amended


 

new clauses

 

Video game production

 

Mr David Hanson

 

Kerry McCarthy

 

Chris Leslie

 

NC1

 

To move the following Clause:—

 

‘Schedule [Video Game Production] contains provision about tax relief for the

 

production of video games.’.

 


 

Independent taxation and family benefits

 

Chris Leslie

 

Kerry McCarthy

 

Mr David Hanson

 

NC2

 

To move the following Clause:—

 

‘The Treasury shall, within six months of the passing of this Act, commission and

 

publish an independent review of the implications of the operation of section 32

 

of the Finance Act 1988 (Married couples—abolition of aggregation of income)

 

on methods of determining eligibility for family benefits including child benefit.’.

 



 
 

Consideration of Bill: 8 November 2010                  

1134

 

Finance (N, continued

 
 

Bank taxation

 

Chris Leslie

 

Kerry McCarthy

 

Mr David Hanson

 

NC3

 

To move the following Clause:—

 

‘The Treasury shall publish a report before the 2011 Budget examining the level

 

of taxation on the banking and financial services industry.’.

 


 

Transparency of PWLB loan rate to local council tax payers

 

Chris Leslie

 

Kerry McCarthy

 

Mr David Hanson

 

NC4

 

To move the following Clause:—

 

‘The Treasury shall publish annually the amount of revenue taken from each local

 

authority in additional interest charges levied by the Public Works Loans Board

 

as a result of the one per cent. rise in rates announced by the Chancellor of the

 

Exchequer in the October 2010 Spending Review, and shall publish the sum equal

 

to that amount as though levied on each council tax payer in that local authority.’.

 


 

Definition of ‘incapacitated person’

 

Chris Leslie

 

Kerry McCarthy

 

Mr David Hanson

 

NC5

 

To move the following Clause:—

 

‘(1)    

The Taxes Management Act 1970, section 118 is amended as follows.

 

(2)    

In subsection (1), the definition of “incapacitated person” is substituted as

 

follows:

 

“‘incapacitated person’ means any person under the age of 18 years or who,

 

within the meaning of section 2(1) of the Mental Capacity Act 2005,

 

lacks capacity in relation to tax or financial matters.”.’.

 



 
 

Consideration of Bill: 8 November 2010                  

1135

 

Finance (N, continued

 
 

Chris Leslie

 

Kerry McCarthy

 

Mr David Hanson

 

1

 

Page  7,  line  40,  leave out Clause 4.

 


 

new schedule

 

Mr David Hanson

 

Kerry McCarthy

 

Chris Leslie

 

NS2

 

To move the following Schedule:—

 

‘Video Game Production

 

1          

After section 1216 of CTA 2009, insert—

 

“Part 15A

 

Video Game Production

 

Chapter 1

 

Introduction

 

Introductory

 

1216A

    Overview of Part

 

(1)    

This Part is about video game production.

 

(2)    

Sections 1216B to 1216G contain definitions and other provisions

 

about interpretation that apply for the purposes of this Part. See, in

 

particular, section 1216C which explains how a company comes to be

 

treated as the video game production company in relation to a video

 

game.

 

(3)    

Chapter 2 is about the taxation of the activities of a video game

 

production company and includes—

 

(a)    

provision for the company’s activities in relation to its video

 

game to be treated as a separate trade, and

 

(b)    

provision about the calculation of the profits and losses of that

 

trade.

 

(4)    

Chapter 3 is about relief (called “video game tax relief”) which can be

 

given to a video game production company by way of additional

 

deductions to be made in calculating the profits or losses of the

 

company’s separate trade.

 

(5)    

Chapter 4 is about the relief which can be given for losses made by a

 

video game production company in its separate trade including

 

provision for certain such losses to be transferred to other separate

 

trades.


 
 

Consideration of Bill: 8 November 2010                  

1136

 

Finance (N, continued

 
 

(6)    

Chapter 5 provides—

 

(a)    

for relief under Chapters 3 and 4 to be given on a provisional

 

basis, and

 

(b)    

for such relief to be withdrawn if it turns out that conditions

 

that must be met for such relief to be given are not actually

 

met.

 

Interpretation

 

1216B

                     “Video Game” etc

 

(1)    

This section applies for the purposes of this Part.

 

(2)    

“Video Game” includes a game played by electronically manipulating

 

images produced by a computer program on a display screen.

 

(3)    

A video game is completed when it is first in a form in which it can

 

reasonably be regarded as ready for copies of it to be distributed to the

 

general public.

 

1216C

    “Video game production company”

 

(1)    

For the purposes of this Part “video game production company” is to

 

be read in accordance with this section.

 

(2)    

There cannot be more than one video game production company in

 

relation to a video game.

 

(3)    

A company that (otherwise than in partnership)—

 

(a)    

is responsible—

 

(i)    

for design, programming and production of the video

 

game, and

 

(ii)    

for delivery of the completed video game,

 

(b)    

is actively engaged in production planning and decision-

 

making during design and programming, and

 

(c)    

directly negotiates, contracts and pays for rights, goods and

 

services in relation to the video game,

 

    

is the video game production company in relation to the video game.

 

(4)    

If there is more than one company meeting the description in

 

subsection (3), the company that is most directly engaged in the

 

activities referred to in that subsection is the video game production

 

company in relation to the video game.

 

(5)    

If there is no company meeting the description in subsection (3), there

 

is no video game production company in relation to the video game.

 

(6)    

A company may elect to be regarded as a company which does not

 

meet the description in subsection (3).

 

(7)    

The election—

 

(a)    

must be made by the company by being included in its

 

company tax return for an accounting period (and may be

 

included in the return originally made or by amendment), and

 

(b)    

may be withdrawn by the company only by amending its

 

company tax return for that accounting period.


 
 

Consideration of Bill: 8 November 2010                  

1137

 

Finance (N, continued

 
 

(8)    

The election has effect in relation to video games which commence

 

design in that or any subsequent accounting period.

 

1216D

    “Video game-making activities” etc

 

(1)    

In this Part “video game-making activities”, in relation to a video

 

game, means the activities involved in design, programming and

 

production of the video game.

 

(2)    

The Treasury may make regulations to—

 

(a)    

amend subsection (1),

 

(b)    

provide that specified activities are or are not to be regarded

 

as video game-making activities or as video game-making

 

activities of a particular description, and

 

(c)    

provide that, in relation to a specified description of video

 

game, references to video game-making activities of a

 

particular description are to be read as references to such

 

activities as may be specified.

 

“Specified” means specified in the regulations.

 

1216E

    “Production expenditure”, “core expenditure” and “limited-budget  

 

            video game”

 

(1)    

In this Part, in relation to a video game—

 

“production expenditure” means expenditure on video game-making

 

activities in connection with the video game, and

 

“core expenditure” means the total costs that relate specifically to the

 

producing and developing of the video game up to the point of

 

commercial release.

 

(2)    

For the purposes of this Part a “limited-budget video game” is a video

 

game whose core expenditure is £3 million or less.

 

(3)    

In determining if a video game is a limited-budget video game, any

 

core expenditure that—

 

(a)    

is incurred by a person under or as a result of a transaction

 

entered into directly or indirectly between that person and a

 

connected person, and

 

(b)    

might have been expected to have been of a greater amount

 

(“the arm’s length amount”) if the transaction had been

 

between independent persons dealing at arm’s length, is

 

treated as having been of an amount equal to the arm’s length

 

amount.

 

1216F

    “UK expenditure” etc

 

(1)    

In this Part “UK expenditure”, in relation to a video game, means

 

expenditure on goods or services that are used or consumed in the

 

United Kingdom.

 

(2)    

Any apportionment of expenditure as between UK expenditure and

 

non-UK expenditure for the purposes of this Part is to be made on a

 

just and reasonable basis.

 

(3)    

The Treasury may by regulations amend subsection (1).


 
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