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Hopes for UK tax breaks receding

Despite pre-election promises, the economic realities make any measures impossible, say insiders

Hopes for the implementation of tax breaks for the UK games community appear to be receding as the overall economic conditions in the country look increasingly bleak, with MPs Jeremy Hunt and Ed Vaizey both facing up to the realities of convincing the Conservative/Liberal Democrat coalition government to help fund the videogame sector.

According to the FT's digital media correspondent Tim Bradshaw, Hunt, giving his first speech as culture secretary today at London's Hospital Club, said he would "love" a tax credit system, but still needed to make the case to the new government.

However, with the Prime Minister David Cameron and new Chancellor George Osbourne both using very strong language about the extent of the UK's fiscal difficulties in the past week, political insiders have indicated to GamesIndustry.biz that announcing any kind of new industry tax breaks would be "impossible," and tantamount to "political suicide".

Back in March, before the UKs general election, the Labour chancellor Alistair Darling promised to support the UK games business with a tax credit system similar to that for regional movie making in the British film industry.

"This is a highly successful, growing industry, with half its sales coming from exports and we need to keep British talent in this country," he said then.

But at today's event, MP Ed Vaizey said that he still supported tax breaks in principle, but admitted in reality it could take two years to usher in a fair system, which would also need to be signed off by the European Parliament in Brussels: "I still support a videogames tax credit. The issue for us is timing," he said in an attempt to manage industry expectations moving forwards.

Conservative MP Vaizey has been a vocal supporter of tax breaks for the UK industry, along with the Liberal Democrats Don Foster and Labour's Tom Watson – all of which promised to continue to support the games sector beyond the general election.

But following pre-election celebrations by the UK games community, the new government has not issued any clarity on a tax relief system, despite the optimism of industry bodies TIGA and ELSPA.

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Matt Martin

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Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.

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