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TIGA sets out design principles for Games Tax Relief

Trade association representing the UK games industry supports rebate model based on Film Tax Relief.

The trade association representing the UK games industry, more commonly referred to as ‘TIGA’ has today published its response to the Government’s recent Consultation on Creative Sector Tax Reliefs; an undertaking announced at Budget 2012 which recognises the contribution that the UK’s games developers are making to the country’s economy.

The consultation has been conducted with the intention of introducing corporation tax reliefs for the ‘animation, high-end television and videogames industries from April 2013, subject to State aid approval from the European Commission’.

In the paper the Government proposes that the UK’s gaming industry might be best served with tax relief that adopts a similar model to film tax relief – which awards a payable cash rebate for film production expenditure – but asks ‘Would adopting a similar model to the film tax relief be an effective way of meeting the Government’s objective to support video games production?’

In a listed-response following a survey of UK-based developers TIGA largely agrees to the Government’s consultation, particularly with a view to mimicking film tax relief, but adds a few additional recommendations which it believes will help boost the UK’s gaming industry; the complete list as follows:

TIGA believes Games Tax Relief should:

- Be based on the Film Tax Relief
- Support educational games
- Support games based on in-game advertising and free-to-play business models
- Be in effect from pre-production to post-launch support
- Incentivise content creation post release – DLC, patches, updates, new content, modifications to game play and debugging
- Not require a minimum spend threshold

TIGA concludes that its proposed Games Tax Relief will enable UK videogames developers and digital publishers over the next five years to boost investment and job creation; secure over 4,660 direct and indirect highly skilled jobs; invest £188m in jobs and games development; increase the games development sector’s contribution to UK GDP by £283m and contribute £172m to HM Treasury.

‘TIGA aims to strengthen the UK video games sector and to ensure that the industry supports the wider economic recovery,’ said TIGA’s CEO, Dr Richard Wilson. ‘If GTR is designed to support both small budget games and larger projects, provides a significant level of relief and incentivises continuous content creation, then we can achieve these objectives.’

‘Games are increasingly being developed as a service, with a large amount of the content being created and released post-launch, and the game evolving over time. So it is important that studios are able to claim relief on costs arising after the release of a game.’

‘TIGA strongly welcomes the growing political consensus in favour of GTR and the recognition by the UK Coalition Government of the economic and cultural importance of the video games industry. A well designed Games Tax Relief will power the industry forward and contribute to economic growth.’