UK games industry

Dundee West MSP Joe FitzPatrick today welcomed a reply he has received from the Chancellor George Osborne which announces that the UK government will consult with businesses in the autumn to review the support which R&D tax credits provide for innovation in the games. In his letter to the Chancellor two months ago, Joe FitzPatrick warned of the danger that the Dundee-based industry would lose out to countries such as Canada and France who have boosted their computer games industry through introducing tax relief on research & development work.

The Chancellor, George Osborne, announced that there were no funds to introduce Tax Breaks for the computer Games industry and the MSP – and the games industry – are fearful of the impact on the Dundee-based industry.

In his reply, the Chancellor states that he “recognises, that, as outlines in your letter, there has been a relative decline in the tax competitiveness of the UK.

“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 7,500 innovative companies each year, including companies in the video games 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. We would welcome any representations on the schemes as part of this process.”

Joe FitzPatrick said today: “I welcome this announcement from the Chancellor which is a recognition that, although he did not introduce tax relief in the emergency Budget, he is willing to review that decision.

“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.

“The dropping of industry support doesn’t make sense as any tax relief would be outweighed by increased growth in the sector. A recent report by the games industry body TIGA has shown that over five years the tax breaks would cost an estimated £192 million but would deliver £415 million in tax receipts. “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. “I am still awaiting replies on the subject of tax breaks, from Jeremy Hunt, Secretary of State at the Department for Culture, Media & Sport and Vince Cable, Secretary of State for Business, Innovation & Skills – and am writing today to chase up these replies.”

Dr Richard Wilson, CEO of TIGA, said: “The Treasury’s decision to drop Games Tax Relief in the June Budget was a mistake. "The UK video games industry is export oriented, employs highly skilled people and is low carbon in output. It is an industry of the future. With the right Government support, the UK can be a world leader in video game development. “TIGA will of course respond to the Government’s consultation document on reform of R&D tax credits. We will seek to make them as beneficial as possible for the games industry. The fact remains, only a dedicated sector specific tax break for games production will put the UK on a level playing field with its overseas competitors.”

ENDS

TIGA is the trade association representing the UK’s games industry. The majority of our members are either independent games developers or in-house publisher owned developers. We also have games publishers, outsourcing companies, technology businesses and universities amongst our membership. TIGA was awarded ‘Trade Association of the Year’ and the ‘Member Recruitment Award’ at the Trade Association Forum Best Practice Awards 2010.

TIGA's vision is to make the UK the best place in the world to do games business. We focus on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members. This means that TIGA members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.

For further information, please contact Eva Field, TIGA PR Manager on: 07814 039 983, or email eva@tiga.org.