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TIGA seeks urgent meeting with Treasury over tax incentives.

6th March 2007

Computer and video games Trade body Tiga has written to the Treasury twice in the last week to express concern over tax breaks regimes that threaten to destabilise the UKâs games industry.

Tiga has been in discussion with Treasury over the last 3 years over the interpretation and application of R&D Tax credits to games developers.

Tigaâs concerns focus on the recent announcement by Eidos that it had decided to set up 350 person mega studio in Montreal, spurred on by Tax incentives which reimburse up to 40% of salary costs, give 5 year tax holidays to employees resettling from Europe, provides a free pipeline of suitably and custom trained new employees through Universities and a more generous R&D Tax credit scheme than in UK.

Said Tiga CEO Fred Hasson âTiga is concerned that the UK one of the founding spirits of global games culture is not getting the support it deserves from its government and that we are likely to loose our position as the third most important producer of interactive content and games in the worldâ.

âThe most alarming aspect of these developments is that the UK will loose its opportunity to continue its tradition of innovation. The R&D tax breaks in Canada will make it more likely that innovation will be stimulated there, whereas in the UK we do not believe the R&D Tax regime is sufficient to encourage thisâ.

âThe other key issues are that we are unlikely to see any expansion in the UK from now from UK and international companies— all future investments being more likely to Canada or elsewhere. Furthermore the UK will be more vulnerable to any downturn in the global economy and fallout from new gen publishing risks, with international companies more likely to let UK studios go, than home based or Canadian based ones.â

Last Friday the government also announced a clamp down on Gaap financing schemes which allow generous tax write offs for high net worth individuals investing in high risk media and other sectors.

Hasson added âIt is not for Tiga to say whether Gaap schemes are on the evasion side of efficient tax management, but this decision will affect investment in projects for Eidos and Codemasters, the only two heavyweight UK publishers left, and this is a cause for serious concernâ.

For further information: Stephanie Rickwood on 0845 094 1 095

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