Government urged on tax relief video games industry

Government urged on tax relief video games industry

by Paul Oxley, Sugust 28, 2009

TIGA, the UK game developers national trade association, presented an all encompassing report to Department of Culture, Media, and Sport, in which they proposed a tax credit relief system for the UK’s gaming industry.

The Government has announced that it is looking into only helping those companies via tax breaks if they make games of a ‘British cultural significance’. However, in the report TIGA claims to have made a strong argument for the cultural value of video games as a whole.

The steps suggested in the report include a cultural test that games would have to pass if they hope to receive a tax break.  The games would be tested on game locations, languages, innovation, narrative, and location of development and key development staff.  TIGA applied this test to a series of UK made games and 44% of them passed.

NESTA (National Endowment for Science, Technology and the Arts) recently conducted a survey on game developers and the industry’s current financial situation.  They found that the proposed tax relief programme would lead to growth in employment, new game development, innovation and investment in the industry. 

If implemented the system is estimated to cost £54m in the first year and then between £32-36m thereafter, and would benefit around 60-80 titles a year in the European market.  Over the course of 5 years TIGA hopes to create 1,400 jobs in the gaming industry and would result in increased investment by the gaming companies by around £146m.

After the initial 5 years of investment TIGA has pledged that the industry will invest £176 for every £100 the Government put in via the tax relief programme.

Chelgate believes that the best way for the video games industry to promote the tax relief proposals would be through direct communication with the Government and consulting Members of Parliament.  We pride ourselves on our relationship with Gordon Brown’s policy unit and those ministers with portfolio responsibility for Culture, Media, and Sport. All Parliamentarians should be listening to a scheme that would lead to high employment rates, which was demonstrated when one of our executives organised a Westminster Hall debate on employment issues in the engineering sector.

For more information on how Chelgate can help the video games industry please contact Paul Oxley on 020 7939 7939 or email.