ELSPA: No "witch hunt" over tax break sabotage rumours

ELSPA has told GamesIndustry.biz that it will not go on a "witch hunt" to find a publisher accused of sabotaging planned tax relief for the UK games business.

A report by Develop Online has suggested that a global publishing company pressured the UK government into dropping planned tax breaks for the local industry, fearing unfair competition from the UK. The report does not name any sources or the publisher allegedly involved.

While not all developers and publishers agree that tax breaks are necessary for the industry, ELSPA director general Michael Rawlinson - who has been at the heart of lobbying and negotiations with the government and MPs - said today that at no point has the organisation comes across such an anti-tax relief agenda from a publishing company.

"We have no idea where that has come from, it's totally left of field and has certainly not been on the agenda of any of the many political briefings we've been involved in," he said. "That's not to say it's not true, but we've been discussing tax relief for some time, and lobbying solidly. It's something we haven't come across."

As an organisation that represents the interests of the publishing community, Rawlinson said ELSPA would look into the rumours, but would not pressure members without evidence.

"We'll certainly make enquiries but it's highly unlikely anyone will admit to lobbying against tax relief for the industry. If we see some hard evidence then we'll listen to that, but there's certainly not going to be a witch hunt."

"These are complicated matters and to say one publisher stopped tax relief for the industry, and that it's not fair, isn't realistic. Following the savage tax cuts and the belt-tightening that the government has announced, irrespective of the benefits to the industry, any tax relief for an entertainment business would have been politically dangerous."

Increased lobbying had put pressure on the last government, noted Rawlinson, echoing feelings in the industry that tax breaks were only ever announced to placate the games business ahead of the election.

"The government went from seeing a lack of conviction for tax relief to seeing the games industry as the best thing since sliced bread last March, and I'm not sure the arguments for tax breaks were any more convincing, there was just more lobbying.

"I think it was a cynical move by a government that wouldn't have had to deal with the consequences following the election."

Although tax relief has been scrapped, new measures for lower corporation tax and National Insurance exemptions are positives for the industry, said Rawlinson, and the government can still work with the industry on skills building.