Tiga pledges to continue tax break campaign

Tiga pledges to continue tax break campaign
Michael French

By Michael French

December 23rd 2009 at 11:33AM

Association moves to 'dispel the myths' about lobbying - and reveals Govt's reasoning behind rejection of tax relief

The latest press statement from Tiga has moved to dispel the myths surrounding its lobbying for a games tax break and why the Government rejected it earlier this month.

Tiga recently met with Government representatives to follow up on its lobbying campaign, and has now concluded that the HM Treasury 'moved the goalposts' after the report was submitting by saying it didn't support sector-speciic tax relief.

And after speaking with two Government ministers and with officials from HM Treasury and the departments for Business, Innovation and Skills and Culture, Media and Sport, Tiga CEO Richard Wilson said it was clear why the request for games tax breaks were denied.

"A senior civil servant from HM Treasury has confided that, irrespective of TIGA’s arguments, because of the state of the public finances and the parlous state of the UK economy, no commitment to Games Tax Relief could be made. The state of the current political cycle, with a general election fast approaching, created an additional hurdle for TIGA’s campaign to surmount," he said.
However despite this defeat, Wilson said Tiga will keep lobbying for game developers.

A statement released said: “There are approximately 900 trade associations in the UK. It is rare for a trade association to be officially invited by the Government to make a case to change UK tax policy. TIGA was invited to make such a case because of our intensive and influential campaign for Games Tax Relief. TIGA was unique in submitting a substantive, 67 page report, based on original research and drawing on expert advice from organisations including Games Investor Consulting, Osborne Clarke, the Tenon Group, Grant Thornton and Games Audit. This was a serious report produced by serious organisations on a serious subject.

 “Some observers have suggested that our proposal was rejected because the econometrics underpinning it was insufficiently robust. Some at HM Treasury doubted our assumptions that absent Games Tax Relief job losses in the video games industry would be permanently lost to the UK economy, believing instead that workers lost to the industry would simply move to other equally high-technology industries. It would be naive to accept this point at face value. This is a standard Treasury line. It ignores the evidence produced by the National Endowment for Science, Technology and the Arts (NESTA) about the threat of a brain drain from the UK games industry to competitor countries.

“This line of argument also misses the point. Digital Britain specifically invited TIGA to make the case for Games Tax Relief on cultural grounds. TIGA’s report delivered this case, emphasising the cultural arguments for supporting a potentially high growth, knowledge intensive sector of the UK economy. After we submitted our report HM Treasury then duly moved the goal posts, claiming that it does not support sector specific tax breaks.

Wilson concluded: “TIGA’s campaign for Games Tax Relief has yielded real benefits. The profile of the industry amongst ministers and policy makers has never been higher. Our campaign indirectly encouraged the Government to make its recent announcement concerning investing £10 million in Abertay University and the centre for excellence in Manchester. Above all, the prospects for Games Tax Relief or a similar measure remain possible after a general election.

“TIGA will continue to campaign for Games Tax Relief or an equivalent fiscal reform in order to make the UK the best place in the world to do games business. Only the faint hearted would give up now.”