Scrapping Key Tax Incentives Would Mean Killing the Goose That Lays the Golden Egg
TIGA, the network for games developers and digital publishers and the trade association representing the video games industry, today urged the Labour Party to continue its support for tax incentives and support schemes for businesses, including Video Games Tax Relief, Research and Development (R&D) Tax Relief, the Seed Enterprise Investment Scheme (SEIS) and the new Prototype Fund. TIGA made the comments in its submission to a Labour Party consultation exercise, Business Incentives Review.
Dr Richard Wilson, TIGA CEO, said:
“Video Games Tax Relief, R&D Tax Relief, the SEIS and the new Prototype Fund are the cornerstones for a flourishing UK video games industry.
“Video Games Tax Relief, a measure which TIGA campaigned for over 7 years, enables the UK video games industry to compete on a level playing against our overseas competitors. Its introduction has fuelled investment, job creation and company growth. Video Games Tax Relief has played a key part in reviving the UK video games industry and helping the sector grow by almost 10 per cent in 2014. Our key global competitors all benefit from similar tax reliefs. For the UK to unilaterally abolish Video Games Tax Relief would be like shooting your top athlete in the foot and then expecting them to win an 800 metre race against competitors in peak condition.
“R&D tax credits can incentivise innovation and technological advancement. R&D Tax Credits can be extremely helpful for small businesses, including games development firms. Profitable companies can reduce their corporation tax bill. Loss making companies can claim a tax rebate. R&D tax credits boost investment. In March 2015, HMRC published an evaluation of R&D tax credits. This evaluation estimates that for every pound spent by the Government on R&D tax credits, between £1.53 and £2.35 is additionally spent on R&D by UK companies. Terminating R&D tax credits would be like killing the goose that lays the golden egg.
“SEIS enables start-ups and small development studios to access finance, innovate and develop new games. Scrapping the SEIS would take the wind out of the sails of the UK’s high technology start-up sector, including the games development industry.
“The new Prototype Fund, managed by The UK Games Talent and Finance Community Interest Company, enables start-up studios to access finance, develop new games and begin to build a viable business. Removing this scheme would simply make it harder for new studios and projects to get off the ground.
“The Labour Party has previously supported sensible tax reliefs and incentives whilst in Government and in Opposition. TIGA trusts that the Labour Party will continue to support smart, shrewd and strategic tax incentives and support schemes for business, including Video Games Tax Relief, R&D Tax Credits, the SEIS and the new Prototype Fund.”
Jason Kingsley, TIGA Chairman and CEO and Creative Director at Rebellion added:
“Policy makers of all political parties could also consider introducing a Creative Content Fund which would provide pound for pound matched funding for games developers. This proposal – which has been supported by the House of Commons’ Scottish Affairs Select Committee – would improve developers’ access to finance, stimulate original IP generation, assist in the retention of IP by developers and promote studio growth. It would enhance the independence and commercial viability of game developers and strengthen the prospects for the expansion of the UK video games industry. The matched funding criteria would help to drive investment and job growth.”
About TIGA
TIGA is the network for games developers and digital publishers and the trade association representing the video games industry. Since 2010, TIGA has won 24 business awards and commendations and has been successfully accredited as an Investors in People organisation three times. TIGA focuses on three sets of activities:Political representation, media representation andbusiness services.
This enhances the competitiveness of our members by providing benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities. It also means our members’ voices are heard in the corridors of power and positively represented in national, broadcast and UK video games trade media.
Get in touch: Tel: 0845 468 2330 Email: info@tiga.org Web: www.tiga.org Twitter: www.twitter.com/tigamovement Facebook: www.facebook.com/TIGAMovement LinkedIn: http://www.linkedin.com/company/tiga For further information, you can also contact: Dr Richard Wilson, TIGA CEO: richard.wilson@tiga.org