Games Tax Relief: dispelling the myths

22nd December, 2009

TIGA, the trade association representing the UK games industry, today dispelled some of the myths about the Government’s reasons for rejecting TIGA’s proposed Games Tax Relief in the Pre-Budget Report. TIGA made the comments following a meeting with two Government ministers and with officials from HM Treasury and the departments for Business, Innovation and Skills and Culture, Media and Sport.

Richard Wilson, CEO of TIGA, said:

“There are approximately 900 trade associations in the UK. It is rare for a trade association to be officially invited by the Government to make a case to change UK tax policy. TIGA was invited to make such a case because of our intensive and influential campaign for Games Tax Relief. TIGA was unique in submitting a substantive, 67 page report, based on original research and drawing on expert advice from organisations including Games Investor Consulting, Osborne Clarke, the Tenon Group, Grant Thornton and Games Audit. This was a serious report produced by serious organisations on a serious subject.

“Some observers have suggested that our proposal was rejected because the econometrics underpinning it was insufficiently robust. Some at HM Treasury doubted our assumptions that absent Games Tax Relief job losses in the video games industry would be permanently lost to the UK economy, believing instead that workers lost to the industry would simply move to other equally high-technology industries. It would be naive to accept this point at face value. This is a standard Treasury line. It ignores the evidence produced by the National Endowment for Science, Technology and the Arts (NESTA) about the threat of a brain drain from the UK games industry to competitor countries.

“This line of argument also misses the point. Digital Britain specifically invited TIGA to make the case for Games Tax Relief on cultural grounds. TIGA’s report delivered this case, emphasising the cultural arguments for supporting a potentially high growth, knowledge intensive sector of the UK economy. After we submitted our report HM Treasury then duly moved the goal posts, claiming that it does not support sector specific tax breaks.

Richard added:

“A senior civil servant from HM Treasury has confided that, irrespective of TIGA’s arguments, because of the state of the public finances and the parlous state of the UK economy, no commitment to Games Tax Relief could be made. The state of the current political cycle, with a general election fast approaching, created an additional hurdle for TIGA’s campaign to surmount.”

Richard concluded:

“TIGA’s campaign for Games Tax Relief has yielded real benefits. The profile of the industry amongst ministers and policy makers has never been higher. Our campaign indirectly encouraged the Government to make its recent announcement concerning investing£10 million in Abertay University and the centre for excellence in Manchester. Above all, the prospects for Games Tax Relief or a similar measure remain possible after a general election.

“TIGA will continue to campaign for Games Tax Relief or an equivalent fiscal reform in order to make the UK the best place in the world to do games business. Only the faint hearted would give up now.”

Ends

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 outsourcing companies, technology businesses and universities amongst our membership.

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 Eva Field, TIGA PR Manager on: 07814 039 983, or email eva@tiga.org.


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