UK games development trade body Tiga says that Chancellor Gordon Brown’s latest economic Budget, detailed yesterday, proves that the government is listening to the industry.

The budget included a rise in R&D tax credits for both small and large businesses, starting in April 2008.

The current of 150 per cent for small companies will go up to 175 per cent while the number goes from 125 per cent to 150 per cent for larger companies. The government has also changed the definitions of company sizes, so that companies with up to 500 staff (up from 250) can claim the higher rate.

Tiga has regularly petitioned the government to address this issue, in light of more generous schemes and subsidies that exist in other countries.

“Three years ago, we proposed at a meeting with Gordon Brown that the definition of R&D used to identify what is or is not R&D in games, should be modified, away from traditional notions related to laboratories and manufacturing industries to reflect the growing importance of knowledge based industries such as games and innovation in these sectors,” commented Tiga CEO Fred Hasson.

“We have consistently told the treasury that the credits were not enough to make a difference to innovation in the games sector and it is good to see the government has listened to what the industry has to say.”