Tiga: Cancelled projects should get tax relief

Tiga: Cancelled projects should get tax relief
Craig Chapple

By Craig Chapple

March 5th 2013 at 1:24PM

Some publishers have left studios 'high and dry' by cancelling projects before completion, says Richard Wilson

Canned game projects should still be eligible for tax relief, industry trade body Tiga has proposed.

The organisation’s CEO Richard Wilson has said that publishers have in the past left studios in the UK “high and dry” by demanding large development teams for extended periods to then cancel a project at short notice.

The scheme would be similar to that awarded to some unreleased films, and Wilson said that unreleased games should benefit from tax relief as long as they pass the cultural test and were demonstrably intended for release.

Tiga also cited its own research from 2011 which claimed 22 per cent of developers in the UK had their games cancelled by publishers prior to completion.

The two proposals form the trade body to the government state that all work involved in pre-production should qualify for tax relief, which involves work on technical design and game design documents.

It also suggested that all work involved in the production of a playable prototype onwards should become eligible for tax breaks.

"Some publishers have been known to leave studios high and dry by obliging them to maintain teams of developers for months on end, only for them to finally cancel projects. This can have damaging repercussions for the studios in question,” said Wilson.

"Just as some expenditure on unreleased films qualifies for film tax relief, so cancelled game projects should in principle be eligible for games tax relief. This is consistent, fair and reasonable. Provided that the game in question would pass the cultural test and is demonstrably intended for release then it should in principle be eligible for games tax relief.”

Tiga Chairman and Rebellion CEO Jason Kingsley added: "Games tax relief is designed partly to promote the creation of new content. By enabling developers to claim relief on cancelled projects, the viability of studios will be enhanced. Studios will have more confidence to develop and pitch new IP to external publishers, or experiment with more direct to consumer business models.

"TIGA will be contacting Government officials to emphasise these issues and to seek clarity of guidance on these points.”

UK games tax relief is expected to be ratified and made accessible to developers across the country from April 1st.

For more information on eligibility, you can view the full cultural test here.