An independent Scotland will keep games industry tax breaks and offer even more support to its studios, the country’s Government has said.
MCV discovered last month that should Scotland vote to become independent in September, it would have to choose if it wanted to keep the recently approved tax relief for games studios.
And even if it did, it would have to get it through the European Commission once again.
MCV reached out to the Scotland’s Government to enquire if they would keep the tax credits, and the minister for Energy, Enterprise and Tourism Fergus Ewing wrote back, telling MCV not only would they keep the relief, but via a slew of other incentives – including cutting Corporation Tax – that game developers in an independent Scotland would be better off than they are now.
He also condemned the UK Labour and Conservative Governments for the lack of support and the delay the games industry has had to endure in receiving the relief.
Note, the ruling Scottish Government (The Scottish National Party) is a major supporter of the Yes Campaign. Other parties, including Labour, which are also active supporters of the games industry, feel the sector will be weakened by an independent Scotland.
One senior Scottish games executive said: “The cultural test in order to receive tax breaks would still have to stand to get through the European Commission. So what would it mean to be a culturally Scottish game?”
Here is what Fergus Ewing wrote in full:
The video computer games sector is very important to Scotland and I have had the pleasure of visiting companies operating in this field. It is an area in which Scotland has had considerable success and we are keen to promote both the industry and the necessary courses and training opportunities for the sector too.
I am grateful for the opportunity to set out our clear and determined approach on the issue of principle which you have fairly raised.
The Scottish Government has long advocated the kind of tax breaks for the computer games industry, which the UK Government has finally introduced. We have made regular representations to both Labour and Tory Chancellors on this issue and have found the lengthy delay in action very frustrating.
It is a prime example of the kind of industry support an independent Scotland would look to offer, and which with the industry of considerably more importance to the Scottish economy, than to the UK’s – would have been available far sooner if decisions had been made in Scotland.
Following a Yes Vote we will use the 18 month period to negotiate with the UK Government on all major matters prior to becoming independent in March 2016. We will start as an independent country by applying the tax regime as is - including the preservation of existing reliefs. Therefore as a fundamental principle the existing tax breaks which are of course designed to incentivise investment and innovation should and will be retained.
This principle is set out in our White Paper on Independence and is of course the correct policy to pursue in order to continue to promote the industry which makes a significant contribution to economic life in Scotland.
In time we also wish to amend the tax regime in order to provide Scottish companies and businesses with a further competitive advantage.
We have therefore pledged that armed with the necessary powers, we will reduce APD by 50%, a tax on travel and tourism - in the lifetime of the first Independent Scottish Government, if we are elected as such.
We have also pledged to give companies an edge by reducing the burden of corporation tax and have committed to using the powers of independence to look at ways to improve and incentivise levels of innovation in Scottish business, particularly business research and development. We also intend to introduce a post study work visa – which will help qualified graduates from overseas – remain in Scotland to contribute to our economy, a policy which the computer games and IT industry as well as those universities offering relevant courses would expect to benefit from.
I should add that our record over the past seven years has been solid using the limited power we have namely over business rates. We introduced the Small Business Bonus Scheme, which helps small businesses pay no or low business rates up to a value of a maximum of around £4,600 last year - a massive advantage and more than our English counterparts enjoy. Around 92,000 businesses in Scotland enjoy this benefit - and therefore I hope that it can be seen that our record is one of delivering a fairer better lower tax burden for small businesses.
I hope that this is of help,
Fergus Ewing MSP
Minister for Energy, Enterprise and Tourism