Small computer games developers ‘must not miss out on tax relief’

By PETER RANSCOMBE
Published on 03/09/2012 00:00

SMALL computer games developers must not be excluded from George Osborne’s tax relief scheme, according to the head of industry trade body Tiga.

Richard Wilson called on the Chancellor to include software houses that are writing small budget games for smartphones and social media networks in the tax break and not just the larger studios that produce titles for consoles.

Alistair Darling’s decision to introduce computer games tax relief in his final Budget was reversed by Osborne after the coalition swept to power.

But Osborne has since performed a U-turn following pressure from the industry and has agreed to bring in tax relief for games developers.

In its response to the Treasury’s consultation on the issue, Tiga called for tax relief to be set at a flat rate of 30 per cent, which it said would allow the UK to compete for overseas investment.

Tiga also wants to see companies given tax relief on costs that arise even after new titles are released.

Wilson said: “If we are to strengthen the UK video games industry and to ensure that the sector contributes to the economic recovery, then the new games tax relief should be designed to support a wide range of games and the new business models that are emerging in the industry.

“The relief should be constructed to help small budget games as well as large projects in order to support small studios as well as more established games businesses, so there should be no minimum expenditure threshold.”

He said there should also be a flat rate of relief of 30 per cent on eligible projects in order to attract global investment into the sector.

Wilson added: “Games are increasingly being developed as a service, with a large amount of the content being created and released post-launch, and the game evolving over time.”