MP Watson bid to improve R&D tax credits

MP Watson bid to improve R&D tax credits

By Rob Crossley

May 11th 2011 at 10:45AM

Tiga calls for studios to pressure their MPs to back petition

The R&D tax credit system needs revision to better suit the games industry, Labour MP Tom Watson has said.

Watson wants a series of improvements made to the R&D tax credit system to ensure they are more desirable for games studios and British businesses.

Watson is calling on fellow MPs to sign an Early Day Motion that proposes an “extension to the scope” of the tax credits plan.

The coalition raised the R&D tax break rate to 200 per cent in the 2011 Budget. Developers can apply to save money on research-led initiatives such as building game engines and technologies.

The vagaries of the policy has left game studios confused about what they can apply for.

Yet now Watson, and Conservative MP John Whittingdale, want to see specific improvements to the system.

Both MPs have co-signed the Early Day Motion – in laymen’s terms a parliament petition – and want ministers and fellow MPs to back the bid.

The EDM’s proposals for improvements to R&D tax credits comes from the advice of games industry association Tiga, which has long campaigned for better business conditions for UK developers.

The EDM wants R&D tax credits to “include costs incurred in development, including premises costs and the cost of applying for intellectual property protection and design.”

The petition also calls on the Government to continue supporting the video games industry, and “increase employment in this highly-skilled, export-orientated, low carbon industry”.

Tiga has called on games studios to pressure their MPs in signing the EDM.

The motion itself is of limited legislative consequence. By definition, an Early Day Motion will have no debate in parliament.

Richard Wilson, Tiga’s CEO, said the group’s proposals for R&D tax credits “will deliver 60-75 per cent more value to games studios than the current R&D tax credit regime. This will enable studios to invest more in R&D, generate and retain new IP, and hire more development staff.”

Chatter surrounding R&D tax credits comes after a series of Coalition rebuffs regarding game tax breaks.

Data shows that the government is investing £159 million less in the British games sector by holding off game development tax breaks and pushing on R&D credits.