TIGA, the trade association representing the UK games industry, called on the European Union (EU) Commission to seize the day and approve the UK’s video Games Tax Relief (GTR). TIGA made the comments in a formal response to the EU Commission’s investigation into the case for GTR.
TIGA has led the campaign for GTR over the last five and a half years. The UK Government finally adopted this policy in the March 2012 Budget, but the EU Commission announced its intention to carry out a formal investigation into GTR in April 2013. TIGA’s response to the EU Commission sets out a compelling case for GTR based on four key arguments.
Video games are cultural products similar to other audio-visual creations (e.g. film) and so merit support
- The game development process is a cultural activity on a par with animation and film production. Video games are developed by teams of artists, animators, musicians (and other audio specialists), designers, programmers and script writers and these are often supplemented by voice actors, regional marketing experts, translators and other cultural localisation specialists.
- Video games interact with other forms of media, for example, inspiring film, literature, music and television.
- Video games are embedded in British life. 33 million people play video games in the UK.
GTR is necessary
- Many games made in the UK are made with an international or Americanised theme, with culturally British elements eliminated. GTR helps to address the problem of the internationalisation/Americanisation of video games in two ways. Firstly, GTR will enable more studios to self-publish and keep a British feel in their games. Secondly, GTR will reduce the cost of games development in the UK and so could incentivise global publishers to take more of a risk on developing games with a British character.
- Employment in the UK development sector shrunk by 7% between 2008 and 2012 (conversely, the Canadian games industry grew by 33% between 2008 and 2011).
- Annual investment was approximately £30 million lower in 2012 compared to 2008.
- In 2012, the UK secured just 5% ($30 million) of the global total of investment in games.
- The UK’s development sector has been hit by a brain drain with 41% of the jobs lost between 2009 and 2011 relocating overseas.
- Since 2007 the UK has fallen from 3rd to 6th place in the world in terms of global sales.
GTR will not distort the EU’s internal market
- Only 2 out of 27 EU countries either have a video GTR (France) or are seriously proposing one (UK).
- GTR is primarily an outward facing measure addressing competitors beyond the borders of the EU rather than between other EU Member states.
GTR’s cultural test is restrictive
- Only culturally British games can benefit from the measure. Games have to pass a cultural test in order to be eligible for GTR.
- The rate of tax relief is limited to 25 per cent, whereas other jurisdictions such as Quebec boast a rate of 37.5 per cent; and
- The scope of the relief is curtailed (gambling games, advertising games, marketing and speculative expenditure on games are not eligible for the Relief).
Dr Richard Wilson, TIGA CEO, said:
“The UK’s Games Tax Relief supports cultural products, is necessary and proportionate in design, and it achieves these results without distorting trade and competition within the EU. The EU Commission should now seize the day and approve the introduction of the UK’s Games Tax Relief.”
Jason Kingsley OBE, TIGA Chairman and CEO and Creative Director at Rebellion, said:
“The culturally British elements of video games are often eliminated from games that are developed in the UK in favour of international or Americanised themes. GTR can reduce this tendency by promoting culturally British video games. Firstly, GTR will enable more studios to self-publish and develop British themes in their games. Secondly, GTR will reduce the cost of games development in the UK and so could encourage global publishers to take more of a risk on developing games with a British personality. TIGA strongly recommends that the EU Commission approves the introduction of GTR in the UK as soon as possible.”
TIGA is the trade association representing the UK’s games industry. The majority of our members are either independent games developers or in-house publisher owned developers. We also have games publishers, outsourcing companies, technology businesses and universities amongst our membership. Since 2010, TIGA has won 14 business awards and has been nominated a finalist for 16 other awards.
TIGA’s vision is to make the UK the best place in the world to do games business. We focus on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members. This means that TIGA members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.
For further information, please contact Dr Richard Wilson, TIGA CEO on: 07875 939 643, or email: email@example.com