Games industry lobbies UK MPs for tax relief

Proposed tax relief for the development of videogames would create 1,400 new jobs and be the catalyst for multi-million investment by British studios, it has been claimed.

Sion Simon, MP and Minster for Creative Industries, was today due to be presented with evidence backing up an industry call for tax incentives that would - if implemented - go some some way to putting the UK on an equal footing to countries such as France and Canada.

A report has been put together by games industry body TIGA, with help from videogame developers such as Kuku Entertainment, Ubisoft Reflections, Blitz Games Studios and Rebellion.

It hopes the Department of Culture, Media and Sport will take on board the wide-ranging recommendations of the report - called Investing in the Future - which also outlines a case for the cultural value of videogames.

TIGA estimates that the Games Relief Tax would cost £54 million in the first year and would fall to between £32 million and £36 million in subsequent years.

The idea is that it would run on similar lines to a tax incentive scheme offered to the film industry and that games would have to pass a cultural test before being awarded any financial leeway.

The tax relief, it says, would depend on European heritage and game locations, languages, innovation, narrative, and location of development and key development staff.

In doing so, TIGA estimates that 1,400 new jobs would be created and investment by games studios would increase by £146m.

This, it adds, would lead to an increase of direct and indirect annual tax revenues by £133m and GDP contribution rises of £323m.

By year five, the report claims that for every £100 of investment by government in the Games Tax Relief, the industry will invest £176 and that between 60 and 80 games each year would benefit.

Dr Richard Wilson, the CEO of TIGA, said: “The evidence presented today provides a robust argument for the introduction of a cultural tax break for games production, which will benefit both the UK games industry and also ultimately the wider economy, providing additional jobs, investment and UK tax revenues.

"We hope the Government will work to introduce TIGA’s proposed Games Tax Relief at the earliest opportunity.”

TIGA says employment in the UK games development sector fell by 4 per cent between July 2008 and July 2009 and a total of 44 firms went bust during that period.

Lord Puttnam of Queensgate, Vice-Chairman of the All Party Parliamentary Group on the Computer and Video Games Industry, said: "To ensure the continuing success of this pre-eminently creative sector, I can only urge the Government to support TIGA’s case for the introduction of a form of Games Tax Relief."