Government calls for ‘cultural tax break’ evidence

The UK’s Department for Media, Culture and Sport has today put out a call to the games industry to provide evidence for a culturally based tax break for the UK development sector.

It comes after the Digital Britain Report, published two weeks ago, said that the Government should consider introducing subsidies that would help protect and encourage more games development business in the UK.

In a letter to the Tiga and ELSPA, the DCMS asked for evidence to demonstrate how the issues currently facing UK game developers can be resolved by the formation of a tax break incentive – specifically, one which has a cultural focus, like the tax break available to film production.

Writing to ELSPA director general Michael Rawlinson and Tiga CEO Richard Wilson, MP Sion Simon, the minister for the creative industries, said: "[Digital Britain] highlights the value of the games industry to the UK economy, the opportunities we would like the industry to be well-placed to grasp and the challenges it faces, including competition from rival games producing countries offering financial incentives not available in the UK. Our commitment to work with you, and others in the games industry, to gather evidence that may support a case for the introduction of culturally based tax breaks for computer games, was influenced by these previous discussions."

He added: "The evidence that we now need from you should demonstrate how the issues the industry currently face can be resolved by the formulation of an incentive with a specifically cultural focus.

"A cultural tax relief of this kind would be aimed at supporting games of significant cultural value to the UK ensuring that the cultural relevance of games is fully recognised. It would also ensure that UK games companies are supported for creating an identifiably British product using the skills and creative expertise of UK games industry workers."

The industry should move quickly, however, Simon added, and the two bodies should collaborate: "How far we can now take this proposal is dependent on the evidence the industry is able to produce to clearly demonstrate how and if this potential measure may work for the UK games sector. Although Government would like to move quickly to ascertain if a case for support can be made, the speed with which we can make progress is therefore reliant upon the quality and timeliness of evidence the industry can provide.

"I would encourage you to work together to produce the required information as, once you have gathered your evidence, we will be able to assess whether we can move on to the next stage and present the case to HM Treasury."

The letter also acknowledges the lobbying work the two have done when it comes to the tax break issue and topics like games classifications.

Both bodies welcomed the Government’s call for evidence.