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TIGA: Tax relief will combat brain drain

TIGA: Tax relief will combat brain drain

Thu 06 Dec 2012 10:22am GMT / 5:22am EST / 2:22am PST
Politics

Dr. Richard Wilson believes that 25 per cent tax relief will combat loss of UK dev talent

TIGA

TIGA is the trade association representing the UK’s games industry. The majority of our members are...

tiga.org

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.”

6 Comments

Bruce Everiss
Marketing Consultant

1,692 594 0.4
This is the idea.
It won't be fast though. Firstly the entrepreneurs have to be tempted into investing. Then initial vacancies will be filled from within the UK. It is only when demand for people rises above the supply that companies will be incentivised to haul people back from Canada.

Remember that the UK is games central for Europe and that considerable numbers of mainland Europeans work in the UK game industry with many more wanting to work here.

Posted:A year ago

#1

Alfonso Sexto
Lead Tester

807 637 0.8
They should have started with this sooner, in my opinion. Better late than never, of course, but a lot of talent going to Canada could have been prevented if the UK government took matter of this issue sooner.

Posted:A year ago

#2
The tax breaks really aren't that much - not once the other creative industries get their share. Sure, it'll do a bit, but what will REALLY stop the brain drain is more that a lot of the Canadian studios are relatively crewed up now.

Posted:A year ago

#3
Actually, its ok the folks that went to Canada did, as it was. UK was not in a position to sustain it as it was.
Also, without the shock factor of the exodus outside of UK, there is no incentive to incentivize to make it a better place.

Needless to say, the various NGOs and MPs have probably been lobbying 9quietly/behind doors/vocally) about the tremendous benefits, educational, R&D and lucrative models of interactive entertainment (including games)

And now that a small toe is in the doors, lets consolidate, establish and strengthen that hold (with a death grip if needs musts)

:)

Posted:A year ago

#4

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Alfonso Sexto

The (then Labour) government were told this about 12 years ago at the Industry Forum in London. All we asked for was the same treatment as film.
In the subsequent years Tom Watson and Ed Vaizey had their ears bent very many times.

Personally I think all corporation tax is bad. It takes out of companies the money they would use for expansion and for creating jobs.

Posted:A year ago

#5
Let's not forget some of the games industry media in the UK has been heavily involved with marketing Canada to UK developers and studios - Nova Scotia (wasn't it them?) were even allowed to sponsor last year's develop awards, for crying out loud. And still the industry went.

Posted:A year ago

#6

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