'Tax aid could save a sinking UK dev workforce'

'Tax aid could save a sinking UK dev workforce'

By Rob Crossley

March 1st 2010 at 11:44AM

Livingstone and Oliver list numerous tax break benefits

Tax break initiatives in the UK would see a significant increase in workforce, studios, projects and income for the Treasury, a panel of industry execs have said.

Taking part in the most recent Develop Jury feature, Eidos life president Ian Livingstone said that Canada’s tax break initiatives are already providing a significant payoff:

“Canada’s headcount has grown 18 per cent between 2008 and now, whereas the UK's fell by 6 per cent,” he said.

“By investing £500 million in attracting the likes of Ubisoft, EA, Eidos and others to set up shop there, the Quebec government has generated £1,500 million in inward investment.”

Livingstone went on to assert that any kind of tax support would not be a “handout as the UK government sees it”.



He said: “It is imperative that the UK government introduces a production tax credit scheme; not to support failing studios but to help build an industry that the UK is so good at.”

Livingstone was not alone in his fervent call for Brown’s government to act now. Blitz Games Studios CEO Philip Oliver spoke of the “massive impact” tax breaks have had in other countries.

“Tax breaks can tip the business model for international buyers and investors in favour of using UK developers,” he said.

“This in turns leads to more work, investment and jobs in UK games development. The great thing is that the government will then tax more people and the net result is increased tax revenue.”

Both Livingstone and Oliver’s responses come from this week’s Develop Jury question, which asked the industry what practical benefits could come from production or workforce tax breaks for the game development sector.

The clear majority view – which you can read in full here – was that tax breaks could bolster projects and workforce.

Assyria CEO Adam Green said his indie studio would be able to employ another member of staff if tax breaks were put in place.

“And larger studios would no doubt be able to employ far more,” he said. 



Meanwhile, a studio head at a leading UK-based developer – who wished to remain anonymous – said that the UK would continue to lose people to other countries where projects and working conditions are more attractive.



He added: “The UK government's current R&D tax credit system is cumbersome and time consuming and less than transparent. Targeted tax breaks to help developers with the cost of staff and equipment could be simple and effective. The incoming changes to the Income tax system are also a step in the wrong direction.”


Wayne Imlach, an experienced game designer who has worked at the likes of Psygnosis, Climax and PopCap, said that tax cuts could reduce financial risks, “which could keep struggling studios afloat when they would otherwise need to close down.”

Go here to read the Develop Jury on UK tax breaks.