Developers still want UK games tax break

Developers still want UK games tax break
Michael French

By Michael French

March 2nd 2009 at 2:19PM

Tiga survey reveals further industry frustrations at tax, finance and skill shortage issues

A new survey conducted by UK games development trade association has suggested that developers across the country are still adamant a tax break for games production would help their business.

The State of the UK Video Game Development Sector survey grilled 100 companies working in the games business.

85 per cent of respondents backed tax breaks for production, 77 per cent recommended more liberal R&D tax credits, 51 per cent called for lower corporation tax and half advocated lower rates of national insurance contributions.

Furthermore, 41 per cent cited foreign government subsidised competition and 31 per cent said the domestic tax burden on business was a barrier to growth.

"The UK games development sector is an industry of the future. It is a highly skilled, knowledge based industry that has huge potential. However, the significant support overseas governments give to their games industries puts the UK games industry at a severe competitive disadvantage. This factor, coupled with difficulties in sourcing finance and skill shortages, are currently barriers to growth and must be addressed," said Dr Richard Wilson, CEO of Tiga.

"The UK games development industry is competing with one hand tied behind its back. Competitor countries from Canada and the USA to France and South Korea are benefiting from government support, most notably tax breaks. This puts the UK at an immediate disadvantage.

"If we want the UK games industry to remain in the premiership the Government must act. An announcement in the 2009 Budget to introduce a 20% tax break for games production would be a welcome start. This is similar to the EU approved French regime that applies to games that pass a cultural test. With a tax break of this kind in place, an additional £220 million could be invested, creating a further 1,600 high quality jobs over five years. This tax measure would also help to level the international playing field. If the Government sits on its hands and does nothing, investment in the industry could fall by up to £180 million and nearly 1,700 jobs could be lost over the same five year period.”