UK Government to Review Developer Tax Relief

[Logan Westbrook]

UK Government to Review Developer Tax Relief

The UK government has not closed the door on tax incentives for the videogame industry, says Chancellor George Osborne.

There was disappointment for UK developers when the tax relief proposed by the old Labour government was scrapped by the new Conservative-Liberal coalition. But commenting on a letter from a member of the Scottish parliament, Osborne said that the matter was far from settled and the government would review the situation this fall.

The letter came from Dundee West MSP Joe FitzPatrick, who said that Dundee - the home of Realtime Worlds and Ruffian Games, amongst others - could lose as many as 200 jobs in the next five years if tax breaks for the videogame industry weren't implemented. Osborne's reply said that the UK had become relatively less competitive on tax than it had been in the past, and it would consult with businesses to see how the situation could best be handled. FitzPatrick said that he welcomed Osborne's comments and that he would liaise with leading industry figures and trade organizations to ensure that the industry's case was presented as strongly as possible.

A recent TIGA report suggested that the cost of tax credits to the government - estimated at £192 million - would be outweighed by the increased tax revenue the newly invigorated industry would generate. "The Treasury's decision to drop Games Tax Relief in the June Budget was a mistake," said TIGA CEO Richard Wilson. "The fact remains, only a dedicated sector specific tax break for games production will put the UK on a level playing field with its overseas competitors."

Source: Edge [http://www.next-gen.biz/news/chancellor-to-"review"-games-tax-credits]


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[Trivun]

At the end of the day, there are a fair few good UK developers (Codemasters, Rockstar's Leeds branch, Lionhead, etc.), not to mention tons of indie developers who are starting to break into the industry, and as an aspiring developer myself I was disappointed to hear originally that there wouldn't be tax breaks for developers. Especially since it impacts on the chances of me being hired in the future. But I did Economics A-Level and have a decent idea of how the economy works, and I have faith in the new government (more than I did in Labour, at any rate).

Thing is, the economy is in a bad way, and the government needs to focus on only spending what has to be spent. Tax breaks for developers is something that the country can't afford right now. And to the naysayers who'll likely claim that the Conservatives are doing what they always do, helping the rich and shitting on the poor, let me make one thing clear. The last budget was actually making cuts for everyone. The government are making sure the rich take the hits as much as the poor, so there is absolutely none of the traditional 'elitism' going on here.

Really though, the gaming industry isn't a massively important part of the UK economy. It's important to us, because we're gamers, but for the country as a whole it's the sort of thing we need to cut back on to save the money needed to get things like public transport, schools, hospitals, etc. running through the remainder of the recession. And if that means no tax breaks, then I'm all for it anyway. Gaming is a luxury, after all. Not a necessity.

 

[Trivun]

When I think of the best ones, there certainly aren't very many (if any) UK-based developers that come to mind. So I'd say this is probably a necessity.

There are plenty, it's just that most aren't massively well-known because everyone thinks of people like Bungie or Activision and so on instead. Lionhead are British (Peter Molyneux is English), Rockstar has bases in London, I believe, and Leeds (near where I live and study at uni), in fact the Leeds branch were responsible for the development of GTA: Chinatown Wars and parts of GTA: Liberty City Stories, if I recall correctly. Codemasters are in Leamington Spa, in the Midlands. And there are countless indie developers.

The UK even has it's own industry Developer's Conference each year, down in Bristol, I believe. It wouldn't do that if there were only a few developers of note in the country, right?

 

[Dr Bob]

When I think of the best ones, there certainly aren't very many (if any) UK-based developers that come to mind. So I'd say this is probably a necessity.

Ubisoft Reflections.

 

[Feystar]

Hmm, I'm not sure that a UK member of parliament would have said that anything would be reviewed this fall...

Autumn, Q3, before the end of the year maybe. But fall, no.

Anyway, they probably just don't want to upset people, so they will say they will review it later, take a look, and then still say no, but at least then they can say they gave it due consideration.

 

[More Fun To Compute]

When I think of the best ones, there certainly aren't very many (if any) UK-based developers that come to mind. So I'd say this is probably a necessity.

GTAIV, Batman: Arkham Asylum and Burnout are some of the highest rated series this generation and are made in the UK. One thing about modern British games is that they are all mostly made for foreign publishers to target a US market which doesn't really have that much demand for games set in the UK with characters who speak with UK accents. Exceptions to this might be fantasy games where Americans expect dwarves to speak with Scottish accents and villains to speak with dramatic English accents.

 

[Poraro]

I like how you guys list Rockstar Leeds but don't even bother to mention Rockstar North.

 

[WelshDanny]

Rockstar North (GTA IV), Realtime Worlds (APB) and Ruffian Games (Crackdown 2) are all based in Scotland. People don't realise how important the British industry is, just because we're not all in your face like the Americans.

Stiff upper lip and all that.

 

[008Zulu_v1legacy]

So they decide to review their decison after Canada poaches their best and brightest? Double thumbs up gents.

 

[Albino Boo]

In terms of the overall British economy the games industry is small beer. The number of people it employs and the amount of money it makes for the uk economy is negligible, in fact less than the fast food industry. In fact the games companies will benefit by 1% cut, per year, for the next 3 years in corporation tax. Also the risk is less in the UK, at some point soon the US and Candida is going to have to start paying for the fiscal stimulus of the past 2 years, in the UK this process has already started. I bet those tax breaks will be amongst the first to go in rounds of cost cutting and taxes increases. If you stay in the UK, ok you wont get tax breaks but you will get a tax cut. Elsewhere you might get tax breaks this year but next year you might not.

 

[Chipperz]

Sweet Jesus, this new government has done more in a few months to make me trust it than Labour did in eight years! Even just admitting they could be wrong is a huge step forward for an organisation whose plan of action has been "fuck up, wait four years, ask new cabinet why they haven't fixed everything yet"... Cameron might do something useful, and the act of writing that out has made me feel so dirty I'm gonna go burn myself clean

 

[IamQ]

At the end of the day, there are a fair few good UK developers (Codemasters, Rockstar's Leeds branch, Lionhead, etc.), not to mention tons of indie developers who are starting to break into the industry, and as an aspiring developer myself I was disappointed to hear originally that there wouldn't be tax breaks for developers. Especially since it impacts on the chances of me being hired in the future. But I did Economics A-Level and have a decent idea of how the economy works, and I have faith in the new government (more than I did in Labour, at any rate).

Thing is, the economy is in a bad way, and the government needs to focus on only spending what has to be spent. Tax breaks for developers is something that the country can't afford right now. And to the naysayers who'll likely claim that the Conservatives are doing what they always do, helping the rich and shitting on the poor, let me make one thing clear. The last budget was actually making cuts for everyone. The government are making sure the rich take the hits as much as the poor, so there is absolutely none of the traditional 'elitism' going on here.

Really though, the gaming industry isn't a massively important part of the UK economy. It's important to us, because we're gamers, but for the country as a whole it's the sort of thing we need to cut back on to save the money needed to get things like public transport, schools, hospitals, etc. running through the remainder of the recession. And if that means no tax breaks, then I'm all for it anyway. Gaming is a luxury, after all. Not a necessity.

Don't forget Rocksteady aswell.

 

[Amethyst Wind]

Should this pan out and we get a significant increase in Games Development from the UK it will only be good news, however saying that video games are still a niche market so it's not going to do much on its own.

Any increase in the exports industry is always a good idea though.

 

[SnipErlite]

Finally. I was expecting them to just ignore the tax break completely, but if they go ahead and implement it I might actually start liking the new government...

 

[luvd1]

I like how you guys list Rockstar Leeds but don't even bother to mention Rockstar North.

I was going to say why nobody seems to mentioned them. Rockstar is a scottish dev team that's branched out around the world. Many think it's American for some reason. It's british through and through. And how come no one has also said Rare?

 

[Spineyguy]

Though it pains me to say it, the UK tax releif won't come. The Tories barely accept the existence of so-called 'video games', and the Lib-Dems are far more concerned with Parliamentary reform to donate any precious bitching time to something important.

Also, the sheer number of people who don't know of any British developers is shocking. It is just assumed that anyone who makes good games must be American or Japanese. Because the Japanese are viewed as being on the leading edge of technology and the Americans have invaded every part of western society. Many of the companies people assume are American have actually moved there so they can get away from the ridiculous taxes imposed by Britain and the EU.

And none of this is going to change any time soon.

 

[Daystar Clarion]

Should this pan out and we get a significant increase in Games Development from the UK it will only be good news, however saying that video games are still a niche market so it's not going to do much on its own.

Any increase in the exports industry is always a good idea though.

I think thats why the tax break may come. The government recognises how much money there is to be made from the game industry. Losing all our good dev teams to another country would be an unwise move economically.