OPINION: Why tax breaks matter

OPINION: Why tax breaks matter

By Develop

January 4th 2008 at 8:00AM

The recent approval of French government tax breaks for developers by the EU was greeted with considerable interest at Blitz HQ.

Over the past few months, both independently and with TIGA, we’ve met with many government figures in a bid to inform key decision makers about what we feel that UK games developers need in order to survive and prosper.

Over the last few years, the government has undoubtedly made an effort to better understand the games industry. The contribution we make to both the economy and to R&D in the UK is now common knowledge in government circles. I’ve found that individuals in government do listen and express sympathy, but that the help that we need from government has still not been forthcoming.

There is political will to help the industry, but the bigger picture in terms of worldwide trade and economics has meant that positive action remains a long-term prospect and one perceived to be fraught with difficulty. However, news of the approval by the EU of the French government’s proposed tax breaks should change that position! Currently, the UK government provides no games-specific tax support or investment incentives. If the UK government is serious about helping developers, then it needs to match the tax breaks that France now delivers. Government support works, as the recent success of the Canadian games development industry has demonstrated.

Inaction from the UK government now will mean that we continue to lose ground to emerging markets. We’ve just dropped from third to fourth place in the world game development rankings, behind Canada. Competing for high profile global contracts has become increasingly difficult because of the cost of developing games in the UK. There are already worrying signs of a talent drain from the UK to emerging markets, and this will only get worse if change doesn’t come soon.

We await the government’s response to the EU’s decision with interest. This is the chance that the industry has been waiting for and it could be a lifeline for some, in the face of overseas subsidies and the weakness of the US dollar. Let’s hope that it doesn’t become a wasted opportunity.

Those that we've met with in government have always said they wanted to help. Now, the way ahead is clear!

Philip Oliver is the CEO of Blitz Games.