Games tax break fears 'lower than expected' in UK

Games tax break fears 'lower than expected' in UK

By Rob Crossley

October 4th 2011 at 11:39AM

British studios upbeat about future business

The UK games industry does not consider game tax breaks a priority concern in comparison to other business issues, new data suggests.

A comprehensive study of more than 80 British studios found that, on average, the general health of the economy was the most pressing concern. Fears over changes in the exchange rate came second, the research found.

The data has been collected in a new survey by e-skills – the UK sector skills council for business and information technology. Studios were given a list of issues that they had to rank, on a scale of 0 (no concern) to 3 (priority concern).

The issue of tax breaks – specifically the levels of support to overseas games firms – ranked an average 1.4.

That result means the matter was not considered more important than the state of the economy (1.8), or changes in the exchange rate (1.5), or availability of skilled programmers (1.4) or the availability of credit for business (1.4).

The tax break issue, however, was ranked as a priority concern (3) by 23 per cent of the survey’s respondents. That suggests the issue is divisive, with many having to rank the issue very low to bring the average down to 1.4.

UK respondents also appeared upbeat about future business. Seventy per cent predict increased profitability, while 64 per cent expected increased turnover.

The study’s author, Peter Hounsome, told Develop he did not expect the issue of games tax breaks to take a relatively low priority.

Games development trade body Tiga has highlighted other data in the comprehensive study as “empirical evidence that government financial support for game development in countries such as France and Canada is significant, widespread and impactful”.

“This Report states that studios in receipt of public support in Canada are receiving support equivalent to 23 per cent of their turnover,” said Tiga CEO Richard Wilson.

“The UK games development sector is creative, innovative, and talented. The potential for rapid growth exists. It’s time for UK policy makers to support the UK games development sector.”