Osborne to "review" tax credits this autumn
UPDATE: TIGA's Richard Wilson welcomes Joe Fitzpatrick's work; promises to "marshal evidence"
Chancellor George Osborne has announced that the UK government will review the support for R&D tax credits for the games business this autumn.
In a letter to Joe Fitzpatrick, MSP for Dundee West, Osborne said that he "recognises that... there has been a relative decline in the tax competitiveness of the UK," adding: "The UK’s R&D tax credit schemes provide an internationally competitive tax regime for R&D activity, providing nearly £800 million of relief and supporting around 7500 innovative companies each year, including companies in the videogames industry.
"To ensure the continued effectiveness of the schemes, the Government will consult with business in autumn 2010 to review the taxation of intellectual property, the support R&D tax credits provide for innovation and the proposals of the Dyson review."
Fitzpatrick said that he would rally the industry to make a stronger case for tax breaks after Osbourne ruled them out in his budget earlier in the year.
"I will be contacting leading industry figures and major stakeholders such as TIGA to ensure the strongest possible representations can be made to this review," he said. "The dropping of industry support doesn’t make sense as any tax relief would be outweighed by increased growth in the sector.
Fitzpatrick's Dundee constituency is home to a thriving games community, including Realtime Worlds and Denki.
"Reports by the computer games industry show that Dundee could lose 200 jobs over the next 5 years as a result of a failure to implement tax breaks, whereas introducing tax incentives would create 350 graduate level Jobs and £45 million of extra investment in Dundee."
The MSP has also written on the subject of tax breaks to Jeremy Hunt, secretary of state for the Department for Culture, Media and Sport, and Vince Cable, secretary of state for Business, Innovation and Skills.
UPDATE: TIGA CEO Dr Richard Wilson has told GamesIndustry.biz that he is pleased with the news.
"It's fantastic to have Joe Fitzpatrick, MSP, campaigning on behalf of the industry along with MPs and MSPs of all political parties," he said today. "We welcome this news that George Osbourne will review the case against tax breaks - TIGA will marshal the evidence and make a compelling case to back this high-technology, hi-skilled, export-oriented industry."