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Videogames industry petitions for tax relief

Hundreds of jobs and millions of pounds of investment would be generated if the videogame industry was granted tax relief, a report out today has claimed.

Gaming trade body TIGA says it has new evidence pointing to the benefits a reduction in tax would have for the industry in Britain.

The organisation has produced an 85-page document detailing how tax relief could create and safeguard 3,366 development jobs and £431 million investment.

It is a revised version of a document that was originally submitted to the Labour government in 2008 to help persuade then chancellor Alistair Darling to announce plans for tax relief in the final budget before the 2010 general election.

Such relief was cancelled, however, by Chancellor George Osborne who said the original plans had been “poorly targeted”.

The report, put together by TIGA, Osborne Clarke and independent games research company Games Investor Consulting, shows the headcount within the British videogame industry has fallen by nine percent since 2008.

It says it gaming contributed £55 million less tax between 2009 and September 2010. TIGA believes tax relief would, over five years, create 1,328 new jobs and save 2,038 jobs, increasing investment in games studios by £138m.

TIGA says any tax relief should be based on a cultural test and be calculated in a similar way to the existing tax relief for British films.

Dr. Richard Wilson, TIGA's CEO, said: “The UK videogames industry is an industry of the future - high tech, highly skilled and export oriented.

“If the Coalition government is serious about its intention of rebalancing the economy then it should invest in the UK videogames industry by introducing a tax break for games production. Games Tax Relief would create jobs, boost investment and generate much needed tax revenue for the government.

“The Coalition government recognises the effectiveness of tax breaks because it already supports the UK film industry with a tax credit. It should adopt the same successful policy for the videogames industry to enable our sector to make a powerful contribution to UK economic growth.”

The games industry contributes £1bn annually to UK GDP and some of the biggest titles in videogaming were created in Britain including Tomb Raider and Grand Theft Auto.

But the industry has faced financial problems and it was starkly felt at Realtime Worlds in Dundee which closed in September 2010. Last week, US-based Activision announced it was looking to sell its development studio, Bizarre Creations in Liverpool, despite it producing critically acclaimed titles such as Blur.