As the Westminster Budget approaches, TIGA unveils its key proposals which include:
Scope: The scope of R&D tax credits credit should be expanded to include other associated costs incurred in the development of a new game: premises costs, the costs of applying for IP protection and design costs.
Rate of relief: The rate of relief under the SME R&D tax credit scheme should be increased from 175% of qualifying expenditure to at least 200%. This would mean that for every pound that an SME spends of qualifying expenditure it would get two pounds of tax deduction which it would use to reduce its corporation tax.
Assistance for loss making companies: SME R&D tax relief should be reformed to help loss making companies. At present, loss making businesses receive 24p for every£1 spent on qualifying expenditure. This should be increased to 28p for every£1 spent, so that loss making, R&D intensive firms also share in our proposed rate of relief.
Process: The claims process should be simplified. Developers should have a named contact within their HMRC R&D Unit to approach with questions about the eligibility of their costs and activities. Further, it would be helpful if the Government could speed up the delivery of the R&D tax relief, which is of course a retrospective form of assistance, and commit to a deadline for approval and settlement of each claim.
Dr. Richard Wilson, TIGA CEO, commented:
“This report highlights how the R&D tax credits system can be reformed to power a high technology recovery. The UK video games industry is a high tech, highly skilled and export oriented industry that needs the right support from Government to continue to flourish. The R&D tax credits system should be reformed to promote additional investment in R&D particularly in small and medium sized enterprises. We call on the Government to support the UK video games industry by introducing TIGA’s proposals to improve the R&D tax credits in the forthcoming Budget.”
Jason Kingsley, TIGA Chairman and CEO and Creative Director of Rebellion, said:
“The proposals TIGA has set out today are estimated to deliver 60%-75% more value to games studios than the current R&D tax credit regime. If the Coalition Government wants to support highly skilled, high-tech industries then it should look seriously at the proposals TIGA has set out and introduce these changes in the Budget on March 23 rd.”
Stephen Timms, MP, member of the All-Party Parliamentary Group for the Computer and Video Games Industry and Financial Secretary to the Treasury in the last Labour Government, said:
“The last Government was right to commit to supporting the high tech, highly skilled UK video games industry, and the current Government should do so in the coming Budget. They should also seriously consider TIGA’s ideas for reforming R&D tax credits to benefit this billion pound, world leading industry.”
Notes to editors:
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 games publishers, outsourcing companies, technology businesses and universities amongst our membership. TIGA was awarded‘Trade Association of the Year’ and the‘Member Recruitment Award’ at the Trade Association Forum Best Practice Awards 2010. TIGA has also been named as a finalist in the 2010 Chartered Management Institute (CMI) National Management and Leadership Awards in the category of‘The Outstanding Organisation of the Year Award (SME)’. TIGA is an‘Investors in People’ accredited organisation.
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.
Powering a high technology recovery: proposals for improving R&D tax credits is available from the TIGA website ( www.tiga.org).
For further information, please contact Dr Richard Wilson, TIGA CEO on 07875939643: or email email@example.com; or contact David Hodges on 02070911653