April 2nd 2009
Tiga today called on the Government to benchmark the effectiveness of tax incentives available for the video games industry in the UK compared to those of other countries. Tiga also urged the Government to benchmark the competitiveness of the overall UK tax system vis-a-vis the G-20 countries. Tiga made the comments following the revelation that the Government does not measure the impact of tax incentives in general, and of the Research and Development (R&D) tax credits in particular, on specific business sectors.
Richard Wilson, CEO of Tiga, said:
“If the Government is serious about supporting innovation in businesses then it must measure the effectiveness of tax incentives, such as the R&D tax credit, that are available to the video games industry in the UK compared to those of other countries. The UK tax system does not operate in a vacuum. Governments around the world are competing to establish favourable tax regimes in order to attract businesses to their jurisdictions and to promote economic growth. Unless the Government measures the impact of its tax measures in relation to those of other countries, it will be impossible to tell whether it is assisting particular economic sectors as well as it could do.
“The Government also needs to benchmark the effectiveness of the UK’s overall tax system in terms of, for example, promoting business growth, investment and job creation in comparison to those that operate in the G-20. The UK’s headline rates of corporation tax– 28 per cent for large businesses and 21 per cent for small companies– are relatively low. However, other taxes have increased in recent years. No wonder that Tiga’s research shows that 31 per cent of game developers believe that the domestic tax burden in the UK is holding back their businesses.
“The Government must start to measure the effectiveness of its tax system and specific tax measures on business in general and in relation to specific economic sectors in comparison to those operating in other G-20 countries.
“Benchmarking is a common business practice. It would be good to see the Government adopting it.”
Notes to editors:
1. Tiga is the national trade association that represents games developers in the UK and in Europe. We have 150 members, the majority of whom are either independent games developers or in-house publisher owned developers. We also have outsourcing companies, technology businesses and universities that are members.
2. 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.
3. The failure of the Government to measure the impact of tax incentives in general and of the Research and Development (R&D) tax credits in particular on specific business sectors was revealed in a written answer by Angela Eagle MP, Exchequer Secretary to the Treasury, to the Conservative MP Philip Davies. See http://www.publications.parliament.uk/pa/cm200809/cmhansrd/cm090401/text/90401w0004.htm#09040162000057
4. For further information about Tiga, please contact: Dr Richard Wilson, Tiga CEO on:
Phone: 0845 0941095
Mobile: 07875 939643