“Government Must Create Conditions For Innovation To Flourish”

By November 4, 2010 Press Releases

TIGA Proposes Changes to the R&D Tax Credit System. TIGA, the trade association representing the UK computer games industry, today proposed that the Government should improve the existing R&D tax credit scheme to help create the right conditions for innovation to flourish and to strengthen the economic recovery. TIGA made the proposals in a research paper jointly developed with Grant Thornton, entitled Enhancing R&D Tax Credits.

Dr Richard Wilson, CEO of TIGA, said:

“If we want to strengthen both UK industry and the economic recovery then we must foster an environment for innovation to flourish. We can help create this environment by encouraging investment in R&D. The UK currently invests a lower proportion of GDP in R&D in comparison to G7 countries such as the USA, France, Germany and Japan. At the same time, business investment in R&D in the UK is relatively low compared to other G7 countries. Currently the UK devotes only 1.8 per cent of GDP to R&D.

“The UK computer games industry is an R&D intensive sector using cutting edge technology to create games for a global market. Many TIGA members do use the existing R&D tax credit system. However they tell us that the current system is too narrow in scope and the claims process too complicated. We would like to see the R&D tax credit system work more effectively and efficiently for the UK economy.

“Most games development companies in the UK are small to medium sized and these firms in particular need greater assistance. Under our recommendations the existing R&D tax credit for large firms should be retained. With respect to the R&D tax credit for small firms, the categories of qualifying expenditure should be widened, the level of relief raised, the value of the relief for loss making companies increased, and the claim process simplified.

“TIGA is committed to making the UK the best place in the world to do games business. We will continue make the case for tax reforms, including improvements to the R&D tax credit system and the introduction of Games Tax Relief. We believe these reforms would benefit not only the games industry but also the wider UK economy.””

Niki Dixon, Tax Partner and Head of Technology, at the chartered accountancy firm Grant Thornton played a key role in developing the report. She said:

“The Department of Business, Innovation and Skills will shortly be consulting on a reform of the R&D tax credits. This provides an excellent opportunity to improve the existing system. While the existing R&D tax credit regime helps some UK games businesses, it is restrictive. This is a global market and more generous tax incentives in other locations are already drawing business away from the UK. If the UK games industry is to compete successfully and if the UK is to support high technology businesses, then the UK Government must recognise the importance of well designed tax incentives in attracting and retaining business.””

Jason Kingsley, TIGA Chairman and CEO and Creative Director of Rebellion, said:

“The UK video games industry is not only R&D intensive, it also employs highly skilled people in an export industry of the future. A typical UK developer generates 62 per cent of their turnover from the export of video games. If the UK Coalition Government wants the video games industry to fulfil its export potential then it must introduce tax reforms including Games Tax Relief and TIGA’s enhanced R&D proposals.””

Mark Gerhard, TIGA board member and CEO of Jagex Games Studio, said:

“The TIGA proposals would, if enacted, help businesses, promote more innovation and enhance the games industry’s competitive edge. I urge all political parties to support these proposals.””For a full copy of ‘Enhancing R&D Tax Credits’ email info@tiga.org.

Ends

Cookies

We use cookies on our site to track activity and visitor numbers - please help us by allowing us to use them on your visit.