UK games industry to get tax relief

By Games Industry.biz Published 25 March, 2010

Government adopts TIGA's plan.

The UK Government is to adopt a tax relief plan put forward by games developer association TIGA.

The plan will offer financial incentives to companies making games that fit certain cultural criteria. Developers who make profitable games will pay less tax on their profits, and the studios behind unsuccessful games will get a tax credit to reduce losses.

"Games tax relief will increase employment, investment and innovation in the UK videogames sector," said TIGA boss Richard Wilson.

"Our research shows that games tax relief over a five year period should create or protect 3550 graduate level jobs, increase or safeguard £457 million in development expenditure and encourage developers to adopt new business models and create new intellectual property."

To qualify, companies must fall within the scope of UK corporation tax. They must also pass a cultural test scoring against a criteria that looks at European heritage, languages, game locations, innovation, narrative and the location of the development and development staff.

The news was announced yesterday by Chancellor Alistair Darling. The Entertainment and Leisure Software Publishers Association welcomed the news, with chairman Andy Payne stating, "It is absolutely heartening news to hear that the Chancellor has offered support for one of the country’s leading creative digital businesses. This is a very significant day for the computer and videogames business in the UK."

"Videogames are the Hollywood of the 21st century," added Wilson. "With games tax relief in place, the UK is guaranteed a leading and successful role."

For more from Wilson, visit GamesIndustry.biz.

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Comments (19) Latest comment 2 years ago

Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!

  • stuarty_2003 #1 2 years ago

    This is an extraordinary announcement for ordinary people, but ordinary people that deserve a little bit of the extraordinary in their lives.
    Edited by 1 at 25/03/10 @ 08:33

  • Amgzone #2 2 years ago

    Gonna be honest, im pretty dumb and have no idea what any of that means but im gonna assume its good news! lol :p

  • LHH #3 2 years ago

    I'm not in with the developers side of things much but I can imagine they're all saying "about damn time" right about now.

  • Doctor_What #4 2 years ago

    Actually we're still saying 'I'll believe it when I see it happening'. The most mass market titles are aimed at a US audience, so that doesn't fit with the critieria very well, does it?

    We'll see how this pans out. It could be great, but I'm not popping out the champagne corks yet.

    EG: it would be very interesting to see a follow up article in a year that reviews how many developers have actually qualified for tax credits for any of their projects.

  • NGCes26294BIV #5 2 years ago

    This won't ever come to pass, because as soon as David Cameron and his toff brigade are in power they will reverse this decision faster than you can say 'Canada'.

  • gjgjg #6 2 years ago

    so cheaper games then maybe................................... didnt think so. buts still good news!

  • ignatiusjreilly #7 2 years ago

    The most mass market titles are aimed at a US audience, so that doesn't fit with the critieria very well, does it?

    It's the same way as film tax incentives work I believe, and although I am a consumer and not a creator, it sounds like a good idea to me. Here is some details of the film arrangement: [link url=http://www.culture.gov.uk/reference_library /media_releases/3019.aspx/
    ]http://ww w.culture.gov.uk/reference_libr...[/link]

    Interesting to note is this line: "One thing the Cultural Test is not, is an attempt to dictate the content or subject matter of British films. Mrs Henderson Presents or Pride and Prejudice could qualify, but so too could Batman Begins - based in Gotham City, but filmed in the UK, employing Brits and using British facilities."

    If that applies, then the law isn't saying you can't concentrate on American audiences (though that would be nice ;) ), but it's more important that the tax breaks given eventually benefit other British companies rather than big American or Asian studios and services.

  • kangarootoo #8 2 years ago

    Wow, unexpected and great news if it goes the distance.

    "so cheaper games then maybe................................... didnt think so"

    Unlikely, but perhaps more games from UK developers, especially smaller ones.

  • GamesConnoisseur #9 2 years ago

    Britishness test is mainly to ensure govt money are being used to benefit UK in a meaningful way ie jobs, investments rather than about Morris Dancer Hero game or similar!

    Good news and still if announced and then Cameron may finds it too unpopular to repeals especially as will be wanting to keep his honeymoon PM going longer as possible if his posh gang get voted in.

  • Bigglesworth #10 2 years ago

    @kangarootoo
    I'm not so sure - the paragraph in the article mentioning the criteria for qualification is a little troubling. It perhaps suggests that, to use two recent examples, a game like Heavy Rain might qualify, but I suspect a game like Muscle March might struggle. Given the "games are bad" crusades in other areas of government, I hope this doesn't become an avenue for politics to guide game development.

    edit: I kind of drifted away from my "I'm not so sure" opener: I'd meant to also wax lyrical about a company perhaps standing more chance of getting help if they were making a potential triple-A from a studio in central London than if they were producing PSN/Marketplace minigames from a trading estate in Yorkshire.
    Edited by 1 at 25/03/10 @ 10:35

  • adofessex #11 2 years ago

    Why would the Conservatives u-turn this? Jobs for creative, talented UK people and graduates, the opportunity for game studios to expand and experiment with new products and employee even more people and help improve the GDP. Wait I think I answered my own question :(

    Edit: Typo
    Edited by 1 at 25/03/10 @ 10:42

  • ignatiusjreilly #12 2 years ago

    As much as I dread a tory government, this is pretty unlikely to be overturned should the Conservatives get in power as they've already expressed similar ideas about trying to boost the games industry. Details could well change of course.

    And as much as people like to moan about nanny state crusades aginst games, there really is very little of that in government from any side. The vast majority of MPs (and seemingly all those with any power to change it) recognise computer games as a growing, important creative sector :)
    Edited by 1 at 25/03/10 @ 11:05

  • The_Inquisitor #13 2 years ago

    About time, but it has been coming.
    Typical that it comes just before a general election, from a party desperate for votes.

  • ignatiusjreilly #14 2 years ago

    @The_Inquisitor

    How many votes will an policy like this really win them? Not many I'd imagine. If that was the plan there are many things they could have done which affect more than just the relatively few number of people working in the games industry.
    Edited by 1 at 25/03/10 @ 13:38

  • kangarootoo #15 2 years ago

    @Bigglesworth

    I would hope that with something like this, politicians only put their oar in when setting the thing up. After that the approval process would be driven by people who have less of a political axe to grind.

    Also, maybe it will mean that small studios need to think more carefully about what sorts of games they make, but at least it gives them extra choices. A studio that could really benefit from a tax break might consider swapping their chainsaws for poetry books :) but the same studio could just carry on business as they always have done.

    Of course the ideal solution would be to give tax breaks to every game studio in the UK regardless of what sort of game they make, but I feel that this particular battle needs to be won one skirmish at a time.

  • makeamazing #16 2 years ago

    How many votes will an policy like this really win them

    You do know that making policy is not just about votes right?

  • ignatiusjreilly #17 2 years ago

    You do know that making policy is not just about votes right?

    Yeah, that was my point. I was disputing the previous poster's comment that they only did this to get votes in the upcoming general election.

  • Murton #18 2 years ago

    Considering that the vast majority of entry level positions in the games industry are temporary or fixed term contracts I'm highly dubious about those job figures.

    Also worth noting is that there are no actual figures on what this will be worth and no timescale for implementation. TIGA's figures are likely based on getting the exact same breaks that the movie industry gets, something which is very unlikely to happen any time soon with the Nation's finances as they are.

    It's also not worth worrying about the Conservatives reversing this decision, supporting the games industry as part of a digital/creative/green economy is a total no-brainer with support from all sides of the house (listen to the cheer when it was announced in the Budget speech), at worst they'll delay any breaks until they are more affordable, which is a good thing as the support will likely be more substantial as a result.
    Edited by 1 at 25/03/10 @ 14:17

  • The_Inquisitor #19 2 years ago

    @ ignatiusjreilly

    I was thinking of the gaming public in general, many of whom will see this as a positive for their favourite pastime. I'm not saying it will win the election for them, only that more people will be pleased by this than those against it.

    I didn't mean it was the only reason they done it, as the financial benefits should be incentive enough, especially with their pro (small) business stance in this budget. Just putting the idea out there.
    Edited by 1 at 25/03/10 @ 17:23