SUPPLEMENT TO THE VOTES AND PROCEEDINGS
Monday 8 November 2010
Report Stage Proceedings
Finance (No. 2) Bill, As Amended
Video game production
Mr David Hanson
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
Negatived on division NC2
‘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.’.
Report Stage Proceedings: 8 November 2010
Finance (No.2) Bill, continued
Negatived on division NC3
‘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
Not selected NC4
‘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’
The Taxes Management Act 1970, section 118 is amended as follows.
In subsection (1), the definition of “incapacitated person” is substituted as
“‘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.”.’.
Page 7, line 40, leave out Clause 4.
Not called NS2
To move the following Schedule:—
‘Video Game Production
After section 1216 of CTA 2009, insert—
Video Game Production
Overview of Part
This Part is about video game production.
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
Chapter 2 is about the taxation of the activities of a video game
production company and includes—
provision for the company’s activities in relation to its video
game to be treated as a separate trade, and
provision about the calculation of the profits and losses of that
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.
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
Chapter 5 provides—
for relief under Chapters 3 and 4 to be given on a provisional
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
“Video Game” etc
This section applies for the purposes of this Part.
“Video Game” includes a game played by electronically manipulating
images produced by a computer program on a display screen.
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
“Video game production company”
For the purposes of this Part “video game production company” is to
be read in accordance with this section.
There cannot be more than one video game production company in
relation to a video game.
A company that (otherwise than in partnership)—
for design, programming and production of the video
for delivery of the completed video game,
is actively engaged in production planning and decision-
making during design and programming, and
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.
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.
If there is no company meeting the description in subsection (3), there
is no video game production company in relation to the video game.
A company may elect to be regarded as a company which does not
meet the description in subsection (3).
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
may be withdrawn by the company only by amending its
company tax return for that accounting period.
The election has effect in relation to video games which commence
design in that or any subsequent accounting period.
“Video game-making activities” etc
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.
The Treasury may make regulations to—
amend subsection (1),
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
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.
“Production expenditure”, “core expenditure” and “limited-budget
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
For the purposes of this Part a “limited-budget video game” is a video
game whose core expenditure is £3 million or less.
In determining if a video game is a limited-budget video game, any
core expenditure that—
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
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
“UK expenditure” etc
In this Part “UK expenditure”, in relation to a video game, means
expenditure on goods or services that are used or consumed in the
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.
The Treasury may by regulations amend subsection (1).