TIGA, the trade
association representing the UK games industry, today published its response to
the Government’s Consultation on Creative Sector Tax Reliefs.
TIGA recommended that the new Games Tax Relief (GTR)
design should be underpinned by the principles of:
·
Helping small budget games as well
as large projects
·
A flat rate of relief of 30 per cent
on eligible projects
·
Relief for post-release costs
·
Eligibility for educational games
Dr Richard Wilson, TIGA CEO, said:
“TIGA aims to strengthen the UK
video games sector and to ensure that the industry supports the wider economic
recovery. If GTR is designed to support both small budget games and larger
projects, provides a significant level of relief and incentivises continuous
content creation, then we can achieve these objectives.
“Games are increasingly being developed as a service, with a large amount
of the content being created and released post-launch, and the game evolving
over time. So it is important that studios are able to claim relief on costs arising
after the release of a game.
“TIGA
strongly welcomes the growing political consensus in favour of GTR and the
recognition by the UK Coalition Government of the economic and cultural
importance of the video games industry. A well designed Games Tax Relief will
power the industry forward and contribute to economic growth.”
TIGA’s Survey
Over
100 developers and digital publishers were polled
89% of respondents were opposed to a minimum spend threshold
52% of respondents prefer the idea of a uniform rate of relief
70% of respondents believe that debugging and maintenance costs that
are incurred after the release of a game should qualify for relief
98% of respondents thought that educational video games should be
eligible for Games Tax Relief
The Design of Games Tax Relief
TIGA
believes Games Tax Relief should:
·
Be based on
the Film Tax Relief
·
Support educational games
·
Support
games based on in-game advertising and free-to-play business models
·
Be in effect from pre-production to
post-launch support
·
Incentivise content creation post release –
DLC, patches, updates, new content, modifications to game play and debugging
·
Not require a minimum spend threshold
Cultural test
Due to the European
Union, Games Tax Relief can only be implemented if it is accompanied by a
cultural test. TIGA firmly believes that video games can be cultural
products. They can reflect the society in which they are created. British
video games developers can: generate iconic characters; create innovative new
video games genres, narratives, art, music and use humour, science and learning
innovations as vehicles for education.
The Government has
not yet formally published its consultation document on the cultural test.
However, TIGA has emphasised to the Government that the more developers and
digital publishers can be given a degree of certainty as to whether a game will
qualify in advance, the more effective Games Tax Relief will be.
Rates of Relief
TIGA is seeking a
single level of relief of 30 per cent. Alternatively, the Government could
introduce two tiered rates of relief:
·
30
per cent for projects up to £250K
·
25
per cent for projects over 250K
The case for Games Tax Relief
The facts
Canada, France, Singapore & USA have tax relief for
games production
No tax break exist in UK
UK sector declined by 10% since 2008
UK studio investment has fallen by £47m since 2008
41 per cent of the jobs lost to the UK dev sector have relocated overseas since
2009
Games being designed in UK but completed in countries with tax relief
Fewer titles with British cultural themes being produced
The
opportunity
The proposed Games Tax Relief will enable UK
video games developers and digital publishers over the next five years to:
·
Boost
investment and job creation
·
Secure over
4,660 direct and indirect highly skilled jobs
·
Invest £188m
in jobs and games development
·
Increase the
games development sector’s contribution to UK GDP by £283m
·
Contribute
£172m to HM Treasury
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. Since 2010, TIGA has won 11 business awards and has been nominated a
finalist for 9 other awards. In 2010 TIGA won two business awards including
‘Trade Association of the Year’ from the Trade Association Forum.
In 2011, TIGA
won eight business awards including ‘Trade Association of the Year’ from the
Trade Association Forum, ‘Outstanding Organisation’ from the Chartered
Management Institute and two Global Business Excellence Awards, including
‘Outstanding Marketing Campaign’.
Richard Wilson won the ‘Leadership Award’ from the Trade Association
Forum and the ‘Outstanding Leader’ award from the Chartered Management
Institute. In 2012, Richard Wilson won the IoD’s East of England
Director of the Year Award. 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.
For
further information, please contact Dr Richard Wilson, TIGA CEO on: 07875 939
643, or email: richard.wilson@tiga.org.