Government Business Taxation Policy at Sixes and Sevens

By December 1, 2010 Press Releases

TIGA, the trade association representing the UK games industry, said today that now that the Government intended to provide a sector specific tax break for the pharmaceutical industry it was time to reconsider the case for Games Tax Relief.

TIGA made the comments following the Government’s announcement on Monday that it planned to go ahead with a tax incentive called the patent box. This tax break will provide a 10 per cent corporation tax rate on income derived from patents held in Britain and will in particular help the pharmaceutical and biotechnology sector, which rely on patents. Few video game developers take out patents.

Dr Richard Wilson, TIGA CEO, said:

“The Patent Box will in effect provide a sector specific tax break for the pharmaceutical and biotechnology sector at an estimated cost of £1.3 billion over two years.

“Yet the Government’s decision to press ahead with the Patent Box demonstrates the complete inconsistency in the Treasury with respect to business taxation. Why is it right for the Government to retain the Film Tax Credit and now to introduce what is in effect a sector specific tax break for the pharmaceutical industry and biotechnology sector but oppose Games Tax Relief for the video games industry? The Treasury is at sixes and sevens on business taxation policy.

“Now that the Government is apparently in favour of sector specific tax breaks, TIGA would urge the Government to look again at Games Tax Relief. TIGA’s Games Tax Relief proposal would generate £415 million for the Treasury, create or safeguard 3,550 graduate level jobs and secure and stimulate £457 million in investment over a five year period. Crucially, Games Tax Relief would more than pay for itself: over five years, our tax break would cost £192 million.

“If Film Tax Credit and the Patent Box are justified, so is Games Tax Relief.”

Ends

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