Government is â??nervousâ?? about games tax breaks

Government is â??nervousâ?? about games tax breaks
Michael French

By Michael French

July 8th 2008 at 12:38PM

But industry can help change authoritiesâ?? views, says culture minister Hodge

The UK Government may be listening to the game industry’s call for a tax break – but culture minister Margaret Hodge has said authorities are ‘nervous’ about implementing any such measure.

Hodge, speaking at today’s UK Games Industry Westminster Media Forum, gave an overview of the way the Government is addressing the much-discussed issues facing games developers over skills and the price of development, but was reluctant to back tax breaks.

“I know this is hugely important to many of you. And you rightly make the comparison between the relief we give to film,” she said.

“I also know and understand what is happening worldwide,” Hodge added, pointing to Canada and France’s tax breaks.

But she added: “We’re nervous about these forms of tax relief. Because it costs us money. And you don’t want to get into an international Dutch auction.”

There were also concerns as to whether such a fund is a good use of tax payer money, she said.

“We’re nervous because we need to think if it provides a sustainable way to provide continuity and growth for the industry.”

However the government is listening to the call from games developers, she said – and now it’s up to the industry to show that a tax break is the only way to save the industry from a ‘total market failure’.

She said: “We have succeeded in persuading our friends across government that we need to look at this – but we need to demonstrate that there is a genuine market failure here. Send us, the Department for Culture, Media and Sport, any evidence you have that would really build the case for a market failure, which we need if we are to be effective to persuade the treasury.”