The games industry has been given the tax relief it so wanted, but the sector trade association has described the announcements in the budget today as a “decisive victory” for its members.
TIGA has said the changes in the UK budget today, which will give the games industry around £7 million, will allow studios to put more financial backing into the research and development. Smaller companies will also be able to plough this dough into hiring more staff and thus developing talent.
However, Dr Richard Wilson, TIGA chief executive, told Aunty Beeb that although the R&D tax credits would deliver 60 to 70 percent more value to games studios than the current tax credit regime, the government hadn’t gone far enough
But he was unhappy that the government had not gone further. He said that the choice was a “dismal decision” and showed the Government showed a “complete lack of imagination and one which will leave the UK video games industry swimming against the tide internationally.”
TIGA has been very vocal about this issue and Dr Wilson has always maintained that the UK video games industry can play a part in rebalancing the UK economy away from an over-dependence upon financial services and the public sector. He said back in February that the UK game development sector provides high skilled employment, is R&D intensive and is an export oriented industry.
However, others may argue that this is a small victory for the games industry, which has been fighting for this right for a good few years. It’s also faced a number of backtracking from Governments.
Back in February the Coalition hinted that it was considering with the idea of tax breaks for the gaming industry after knocking the scheme when it was introduced by
Labour MP Alistair Darling in the Labour government’s last budget in March 2010.
At the time George Osbourne called the plans “poorly targeted,” but then made a U Turn with the media hinting that he could have been planning to include £30 million of tax relief for the video games industry. Again, TIGA had its say claiming this would be slightly short of the £100 million mark it had requested.
He also pointed out at the time that in 2009, the video games industry generated £2 billion of sales, added approximately £1 billion to the UK’s GDP, raised over £400 million for HM Treasury in tax revenues, and employed more than 28,000 people.