Dr. Richard Wilson, CEO of the UK trade body TIGA, believes that the tax relief granted to Britain's games industry will help to reverse the exodus of talent to countries like Canada in recent years.
Cities like Montreal and Toronto have become global centres for game production thanks to generous government tax incentives. In his autumn statement yesterday, chancellor George Osborne confirmed that similar tax relief will be available for UK game productions from next April. At 25 per cent, it is lower than the 30 per cent that TIGA campaigned for, and some way short of the 37.5 per cent available in Canadian territories like Quebec.
“It will still make a big difference,” said Wilson, speaking exclusively to GamesIndustry International. “The provision of a 25 per cent level of relief will boost growth in the UK games industry and leave studios with more resources available for investment.
“Games Tax Relief should certainly ameliorate the brain drain, and indeed it will encourage investment and increase employment opportunities in the UK games industry.”
According to Wilson, the impact of tax relief will be broad, benefiting a range of people within and affiliated with the UK games industry: students, skilled job seekers, digital publishers, and the country's creative industries and economy at large.
However, many of the details of how the tax relief will work have not been finalised. In particular, the government will soon publish its proposal on which aspects of games production will be covered by the tax relief, and how it will be applied. It is also poised to reveal more detail on the cultural test, which will dictate which productions can qualify for relief in the first place.
“TIGA argued that the government should refrain from introducing a minimum spend threshold before a game can qualify,” Wilson said. “This is because we want start-ups and small studios to benefit as well as larger studios. I'm optimistic that the Government will agree to this.
“TIGA also urged the government to frame games tax relief so that it supports post-release costs. Games are increasingly being developed as a service, with a large amount of the content being created and released post-launch, and the game evolving over time. So it is important that studios are able to claim relief on costs arising after the release of a game.
“We've also argued that Games Tax Relief should support educational games. I think we can be confident that the Government will support both of these proposals.”
Tax relief for games and the UK's other creative industries is now awaiting approval from the European Commission, but Wilson is confident that it will be agreed. If all goes according to plan, it will be operational by April next year.
“TIGA aims to strengthen the UK video games sector and to provide a network that enable developers and digital publishers to succeed. We've campaigned consistently for Games Tax Relief over the last five years and so it's excellent to see this measure come a little closer to reality today.
“This is a good day for games developers and digital publishers, the creative industries in general and the wider UK economy.”