TIGA wants tax relief for cancelled games

Says 22% of UK developers have had games cancelled by publishers

Trade association TIGA has called for protection for cancelled projects under the government's new Games Tax Relief.

"Some publishers have been known to leave studios high and dry by obliging them to maintain teams of developers for months on end, only for them to finally cancel projects. This can have damaging repercussions for the studios in question," explained CEO Dr Richard Wilson.

"Just as some expenditure on unreleased films qualifies for film tax relief, so cancelled game projects should in principle be eligible for Games Tax Relief. This is consistent, fair and reasonable. Provided that the game in question would pass the cultural test and is demonstrably intended for release then it should in principle be eligible for Games Tax Relief."

The associations's 2011 research found that 22 per cent of UK developers had experienced a cancellation by a publisher before a game was completed. It suggests that pre-production work and prototypes should qualify for Games Tax Relief.

"Games Tax Relief is designed partly to promote the creation of new content," added Rebellion CEO Jason Kingsley.

"By enabling developers to claim Relief on cancelled projects, the viability of studios will be enhanced. Studios will have more confidence to develop and pitch new IP to external publishers, or experiment with more direct to consumer business models. TIGA will be contacting Government officials to emphasise these issues and to seek clarity of guidance on these points."

Draft legislation for the Games Tax Relief was published in December, and revealed support for post-release development like DLC, a cultural test to judge games' eligibility for the scheme and that there would be no minimum budget.

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Latest comments (9)

gi biz ;, 5 years ago
Wouldn't this open the way to a number of possible frauds?
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Russell Watson Senior Designer, Born Ready Games5 years ago

A certain German director springs to mind?
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Benjamin Crause Supervisor Central Support, Nintendo of Europe5 years ago
I believe this would be a dangerous move.
Tax reliefs should be only granted to those who produced an actual product that enters the market and creates revenue/taxes.
Otherwise it would look like a scam and opens up for all kind of frauds.
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Show all comments (9)
Shane Sweeney Academic 5 years ago
Can someone genuinely explain to me how developers don't have cast iron contracts with publishers with built in penalties for cancelling projects? I've worked in many software industries and this is pretty normal? Are publishers just to big and powerful compared to small developers?
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Matthieu Mandeville Technical Game Analyst, Gameloft Montreal5 years ago
Isn't hat basically what R&D tax credits are for in the first place?
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David Amor Director, MAG Interactive5 years ago
In theory you're always working on a full Software Development Agreement complete with kill fees but in practice it takes a long time to get the SDA in place and you're often just running on an ever-extending Statement of Work. It's an exposed position but pragmatism means that's often the case. I've also seen plenty of SDAs either with insufficient kill fees or without them altogether.

Edited 1 times. Last edit by David Amor on 6th March 2013 5:36pm

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This may be the straw that breaks the camels back - executives of a number of high profile developers have managed to avoid legal sanction of corrupt or inept business practice - a TAX recoup on failed projects would come with a declaration of responsibility and the possibility of prosecution for fraud and illegal practice / reporting. I think TIGA may have picked a wrong move with this as it could see their members in the dock!

Also what happened to that Whistle Blower hot line about bad practice in development studios?
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Adam Campbell Game Production Manager, Azoomee5 years ago
Call me biased but I think whatever films get in the UK, games should have access to as well.

I don't see why one should get all the benefits over the other, especially when our games industry is so powerful and has a lot more potential still.
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Fran Mulhern , Recruit3D5 years ago
The problem is value for money for the taxpayer. Cancelled games won't go down well with the public, so the government probably won't allow it. We'll know soon enough though.
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