National paper claims chancellor is preparing 'eye-catching' measure; Industry rebuilding relationship with Treasury
The UK games industry is braced for another tense Budget report, as new indications suggest George Osborne could re-introduce games tax breaks into the finance bill.
Last year the chancellor abandoned plans for the tax relief just weeks into his tenure – despite Conservative promises to the contrary – in a move that quickly established him as a political piñata for the British games sector.
Yet in recent weeks, and with the March 23 Budget looming, the government has noticeably cultivated more positive connections with the digital entertainment industries.
Recently Osborne held private meetings with senior figures across various media and entertainment industries – of which one connected individual told Develop was “not customary”.
Now a fresh report, published today in the Sunday Times, claims that Osborne is “considering the introduction of tax breaks for the computer games industry as an eye-catching measure to put in his budget for growth”.
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The article estimates that £30 million will be used to finance the tax break initiative.
When approached by Develop today, a Treasury spokesperson declined to comment on pre-budget rumour.
Michael Rawlinson, the director general of games trade association UKIE, told Develop that recent developments were “a sign that the government is taking the games industry seriously”.
“The government is seriously looking for initiatives that support Britain’s creative industries, and the games industry is an important one for them,” he said.
He didn’t know specifically if games tax breaks would be introduced into the finance bill on March 23, but he thought it not unlikely that the government would want to introduce an “instrument of support” for the sector.
Fellow trade association Tiga believes that games tax breaks could create 1,300 new games industry-linked jobs by 2015 – providing any tax break initiative would follow its own guidelines.
Tiga’s plan for games tax breaks would cost over £100 million in public funding – more than three times the amount estimated in the Sunday Times report.
The association's CEO, Richard Wilson, said tax breaks would be “a measure that would not only help a vast majority of video game developers, but also the wider UK economy.”
He added that Tiga “will continue to campaign aggressively for games tax relief in the run up to the Budget”, and will also urge the Government to enhance the existing R&D tax breaks.
Too little, too late.
Admittedly there are far fewer studios in existence and at full strength in the UK than when these tax breaks were first mooted back in 2009. However, it's a case of 'If you build it, they will come'.
Until Canada's tax break initiative they were some way behind the UK in the world's game development league table. Major developers and publishers flocked to Canada to take advantage of the savings to be made. I don't think the UK would be any different.
For my mind, we produce some of the best games development talent in the world. If we can compete on an even keel with the global development community from a financial perspective, there's no doubt in my mind that major studios would flock here to take advantage of the incredible talent pool.
Fingers crossed!
