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EA's Keith Ramsdale

The Northern Europe boss talks tax, TIGA and why long term govt engagement is important

The UK tax breaks issue isn't going away - probably something to be expected given the emotive nature of the subject, and constant (and troubling) comparisons to other countries.

Here EA's VP and GM for Northern Europe, Keith Ramsdale, explains his thoughts on the subject - why they're a little more toned down compared to some, and why he believes there are benefits in playing the long game. There's been more discussion in the press recently about the lack of tax breaks for the games industry in the UK - what's EA's position on the matter?
Keith Ramsdale

I've seen the comments made by other executives in the industry, and we've been talking about that. I personally am pretty close to our relationship in the government here in the UK, and look - our position is quite different.

We've got quite a pragmatic view of what we can expect out of working with the government; we work quite closely with them - I'd like to say we have quite a good relationship, and I think they're quite open to what needs industry has, whatever industry that may be.

I think that this industry, and the companies within the industry, need to be pragmatic on the issues that the government faces today. We're not going to suddenly be handed a great big tax relief bill when the government's facing the economic issues it is - I think that cuts to the chase on this.

The conversations we've had with government are pretty clear on this. That doesn't mean to say that we're not arguing the need for tax credits - and of course arguing the need for an equitable status with other entertainment industries; and I think that's an important point that hasn't been made clearly by others. What applies to other entertainment sectors needs to apply to the videogames industry.

But consumers are being faced with austerity measures, and I don't think it looks great on a company to be bleating loudly that we want our P&L to look better by having tax credits given to us, by the very government that's having to pass these austerity measures onto consumers.

We want to have a long term conversation with the government, so that as the economy improves, we're ready with a strategy together with them to actually then start to see an R&D tax credit scheme come to fruition as the government's in a position to be able to deliver against that.

Actually, I think if you look at the way that it works, there are schemes in place that companies do benefit from. Some of the work that we've been doing with UKIE - of which I'm a board member, and it's a pragmatic bunch on that board - we've been having those conversations.

While R&D tax credits remain a criterion that in the longer term we'd very much like to see played out, we're also talking to them about other financial options that could run. Some of them are schemes that are currently available, and actually the conversation is how we can make access to them easier.

So it's about a little sense check - EA does have a different, much less aggressive view than our big competitor there, who doesn't speak on behalf of all of us. So let's make it crystal clear - EA is not against tax credits; it's proposing that people need to take a step back in the response to the way that things have gone in the past six months.
Keith Ramsdale

Yes, I think that's exactly right - and I think that tax credits have their place. UKIE is working on how that tax credit proposal might work best, and in the meantime there's an access to finance programme that UKIE's working up with the government, of which tax credits is one part.

Access to current financial measures that are in place for business - it's making that more available, particularly for small- and medium-sized businesses. We support that. I suspect the point about SMEs is really the key to a lot of the emotion - rightly or wrongly - we've seen on this issue. This is a global business, and if videogames were only made in the UK, maybe it would be less of an issue - but the truth is, the playing field isn't level and economic crisis or not, that's not something that helps the situation.
Keith Ramsdale

No, and I think the difficulty is, to be frank, that you have to look at the total package of what it takes to develop games in a country. Just looking at the headline R&D tax credit that's available, without looking at the whole macro-environment of creating games really is just banding words.

It could be, when you look at the total piece, that there are more favourable territories from time-to-time, and I think that becomes cyclical as tax breaks and skillsets vary by country. Of course, skills are just as important as tax - it's all very well having great tax breaks, but you've got to have the skills there are well.

A key conversation between UKIE and the government isn't just around tax credits - coupled with that is skillsets. We're saying to them that we need to have good quality skills, and they're not quite there at the moment. The long term plan is, how do we build the skillset and make this an attractive country - with skills and remuneration - to maintain the fantastic British creative talent that we have.

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