£159m loss between R&D and game tax breaks

£159m loss between R&D and game tax breaks

By Rob Crossley

March 24th 2011 at 12:11PM

Governmentâ??s industry investment has fallen sharp since 2010 General Election

Improvements to R&D tax credits will mean the Coalition Government is investing £159 million less in the UK games industry, independent data suggests.

The coalition last year reneged on its pledge for game development tax breaks, though in yesterday’s Budget it was applauded for raising the R&D tax break rate to 200 per cent.

But data shows the government is investing £159 million less in the British games sector by holding off game development tax breaks.

Tiga CEO Richard Wilson told Develop that game development tax breaks would inject £194 million into the games industry over a period of five years.

Former Chancellor Alistair Darling approved the measure, before his successor George Osborne axed the deal.

Wilson said that R&D credit improvements will, by comparison, provide £35 million.

The difference between the two policies represents £159 million less that the Coalition will provide to the UK industry.

“I’m really glad Tiga managed to deliver £7 million to the UK games industry per year,” Wilson said, “but this is one part of our ongoing campaign.”

He said games tax breaks are the “clear number-one priority” for Tiga.

“Tax breaks can help all studios in the UK, small and big”.

Develop understands that R&D tax credits will not allow British studios to save money on game production, but instead research-led initiatives such as building game engines. That claim is being verified.

Some game studios have also told Develop that applying for R&D tax credits can be prohibitively complicated and stagnated.

Exchequer Secretary David Gauke said on Tuesday: ”On video games tax relief, we looked at it and did not feel that it achieved good value for money for the taxpayer.”