TIGA,
the trade association representing the UK games industry, said today that the
Government’s announcement that it intends to maintain the film tax relief until
at least the end of December 2015 was excellent news, because it demonstrated the
positive impact of a well-targeted, sector specific tax break. TIGA called on
the Coalition Government to review the case for further sector specific tax
breaks to support the creative industries as part of a general policy to
promote economic growth.
The film tax relief
scheme promotes the production of culturally British films and in 2009/10
provided around £95 million of support to the British film industry, supporting
over £1 billion of investment in 208 films.
Additionally, lottery funds invested in film are rising from £27 million
in 2010 to £43 million in 2014. The Coalition Government has yet to introduce a
well-targeted tax break for games production.
Exchequer Secretary to the Treasury, David
Gauke, said:
“The UK film industry makes a vital
contribution both to the economy and cultural landscape and the Government is
committed to supporting it through film tax relief. This scheme, along with the
quality of the UK’s infrastructure and high levels of skills, has led to the UK
being recognised around the world as an attractive destination for film
production.” (http://www.hm-treasury.gov.uk/press_124_11.htm)
Dr Richard Wilson, CEO of TIGA, said:
“The Coalition Government is right to support
a sector specific tax break for the film industry. Yet just as a film tax
relief can make a vital contribution to the economy so can a well-targeted tax
break for games production.
“TIGA’s research shows that over 5 years, Games Tax Relief would create or safeguard over 9,500
direct and indirect jobs (including over 3,350 jobs in the games industry),
£431 million investment in development expenditure, and £394 million in tax
receipts to HM Treasury, at a cost of £194 million in tax relief to HM
Treasury. In other words, Games Tax Relief more than pays for itself.
“Given the
deteriorating economic conditions in the Eurozone and the weak state of the UK
economy, now is the time for the Coalition Government to support creative industries
including the video games sector as part of a general policy to promote
economic growth. A good start would be to re-examine the case for a
well-targeted tax break for games production.”
T
IGA,
in addition to leading the campaign for Games Tax Relief, has also advocated:
the establishment of a Creative Content Fund to help game developers to access
finance more easily; improvements to the SME R&D Tax Credit; and measures
to enhance education and training, for example, by incentivising the study of computer science
degrees and by providing tax relief for expenditure on workforce development.
Ends
Notes
to editors:
About
TIGA:
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. In 2010 TIGA won two
business awards including ‘Trade Association of the Year’ from the Trade
Association Forum. In 2011,
TIGA won six business awards including ‘Trade
Association of the Year’ from the Trade Association Forum and ‘Outstanding
Organisation’ from the Chartered Management Institute. Richard Wilson won the ‘Leadership Award’
from the Trade Association Forum and the ‘Outstanding Leader’ award from the
Chartered Management Institute. TIGA is an Investors in People organisation.
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.
About
the film tax credit:
1.
The extension of film tax relief follows the European Commission’s State Aid
approval of the Government’s application to extend the duration of the scheme
to 31 December 2015. The design of the scheme remains the same as that
previously authorised.
2. The relief is aimed directly at film production companies for the expenses
they incur on the production of a film intended for theatrical release in
commercial cinemas. For a film to be eligible for relief, it must be certified
as British, either by passing a cultural test or under an agreed co-production
treaty, and must incur at least 25% of the total production expenditure in the
UK.
3. Relief can only be claimed on production expenditure in the UK, up to a
maximum of 80% of the total budget, and a higher rate of relief is available
for limited-budget films (with total production expenditure of £20m or less).
Companies not making a profit may be able to surrender the relief for a payable
tax credit worth up to 20% of the total budget for a limited-budget film and up
to 16% for other films. A higher value of support may be achieved if the relief
is used to reduce company tax liabilities.
4. Certification of films is currently administered by the British Film
Institute on behalf of the Department for Culture Media and Sport.
For further information, please contact Dr Richard
Wilson, TIGA CEO on: 07875 939 643, or email richard.wilson@tiga.org.