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Digital Britain: The Final Report

Tiga "winning fight for UK tax breaks" to judge by Government White Paper.

Immediate release

June 17th 2009

Tiga said today that it was winning the argument in its campaign for the introduction of a tax break for games production in the UK. Tiga made the comment in response to the publication of the Government’s White Paper, Digital Britain: The Final Report.

Tax break for games production

Richard Wilson, CEO of Tiga, said:

“We are winning the argument on tax. The Government has made a categorical commitment in a White Paper to work with the games industry to collect and examine the case for a tax break for games production and to give serious consideration to the proposal. This represents major progress.

“Encouragingly, the Government’s explicit objectives in the White Paper are to support the creation of new IP and technology in the UK; to maintain a critical mass of skilled personnel to produce culturally British games; and to encourage the production of culturally significant video games that might not otherwise be made in the UK.

“The Government has at last officially recognised that support by overseas governments for their games industries has put the UK development sector at a disadvantage and that many independent developers do not have sufficient support to enable them to maintain ownership of their Intellectual Property. Tiga will continue to collect and provide the evidence that the Government needs to justify the enactment of a tax break for games production. We hope that the Government will publish concrete proposals for a tax break for games production in the Pre-Budget Report in November 2009.”

Tiga also commented on a range of other subjects in the White Paper.

Recognition of the video games industry

“We are winning the argument on the importance of the industry. Digital Britain: The Interim Report (January 2009) ignored the video games industry. The final report recognises the important economic contribution that the sector makes to the UK economy.”

Skills and training

“We are making progress on skills. The Government has acknowledged that overseas companies are poaching UK developers and that skill shortages are holding back our sector. However, we need more detail on how to improve the supply of highly skilled and qualified people available to work in the games industry and other parts of the knowledge economy.

“Promoting the 14-19 diplomas is unlikely to achieve this. Instead, the Government should provide stronger financial incentives to attract the best graduates to teach GCSE and A level subjects such as mathematics and the sciences in schools. A career in the video games industry should be promoted in school, in part to encourage more young people to stick with science, technology, engineering and mathematics subjects.

“In higher education, tuition fees for mathematics and computer science students should be reduced in order to increase the supply of graduates in these areas. Cuts in computer science courses should be reversed.

“Universities that offer either accredited games courses or which have very strong and verifiable links with games businesses and which are providing high quality courses should receive preferential funding from HEFCE.

“The Government should also consider establishing a Tiga managed Games Education Fund which could promote industrial secondments, research fellowships, and education outreach and knowledge transfer programmes. This would build links between developers and academia and strengthen the competitiveness of the UK games development sector.

“Existing Government policy is focussed on raising the proportion of the workforce that is qualified to levels 2 and 3. Schemes such as Train to Gain should be made more flexible so that subsidised training is available to help employers in the games sector and elsewhere train their employees to level 4.”

Research and Development (R&D)

“The R&D tax credit is important to many businesses, including those in the video games industry. However, the Government should aim to measure the effectiveness of the UK R&D tax credit against those that operate in other countries. We need to establish an R&D tax credit that compares favourably against other G7 and OECD countries in terms of generosity and impact.”

Video games classification system

“Tiga supports the Government’s decision to endorse an enhanced PEGI system for classifying video games. This approach will see a UK-based body, potentially the Video Standards Council, designated statutory classification body for video games and applying the PEGI ratings which would be enforceable in law. All video games would be rated using the PEGI system. The only role for the BBFC would be to classify film content which is not integral to the game.

“This approach would be simpler for many games businesses because they would not typically have to comply with the BBFC’s classification system (the exception being if a boxed game included film and video content). Compliance costs would therefore be generally cheaper with this option.”

Telephone tax

“Tiga does not support the proposal to impose a £6 per annum tax per landline telephone on all businesses and households in order to fund the installation of fibre optic networks in areas where it would not otherwise be commercially viable. Rather than increasing the tax burden on businesses and consumers it would be better to give BT, Virgin and other businesses tax incentives to provide fibre optic networks.”

Notes to editors:

1. Tiga is the national trade association that represents games developers in the UK and in Europe. We have 150 members, the majority of whom are either independent games developers or in-house publisher owned developers. We also have outsourcing companies, technology businesses and universities amongst our membership.

2. Tiga's vision is to make the UK the best place in the world to do games business. We focus on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members. This means that Tiga members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.

3. The White Paper states at Point 49 (p. that “The Government has therefore committed to work with the industry to collect and review the evidence for a tax relief to promote the sustainable production for online or physical sale of culturally British video games.”

For further information, please contact: Dr Richard Wilson, Tiga CEO on: 0845 0941095; Mob: 07875 939643; or: Email: richard.wilson@tiga.org, or Eva Whitlow, TIGA PR Manager on: Mob: 07814 039 983; Email: eva@tiga.org.

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