Tax breaks plea from Scots video games firms

Published on Monday 7 February 2011 14:44

THE UK government has been urged to do more to help an "outstanding" Scottish video games industry take advantage of a "golden age of opportunity" in a global sector worth £33 billion a year.

The Scottish affairs committee called on Westminster to make the future of the sector a priority in the face increased international competition and emerging barriers for growth.

However, the powerful group of MPs refused to endorse industry demands for tax breaks to help video companies compete with overseas government subsidies and cheaper labour markets.

Instead, it recommended that the possibility of introducing a tax relief system for the industry should be kept "under review".

Ian Davidson, the chairman of the committee, said: "The committee strongly believes that the video games interactive technology industry is potentially a world leader for the UK and the government must do more to encourage development and growth in the sector."

The committee report states that there are compelling arguments for a tax relief.

However, the report reveals: "The committee is divided over the issue of tax relief for the industry and we are unlikely to come to a consensus on this issue.

"We recommend that the government, meanwhile, undertake a full and comprehensive assessment to determine the benefits of such a relief, as well as examining those countries whose industries continue to flourish without government support."

Dr Richard Wilson, chief executive of the Independent Games Developers Association, said: "The UK video games industry is hi-tech, highly skilled and export-oriented.

"If the coalition government is serious about its intention of rebalancing the economy, then it should invest in the UK video games industry by introducing games tax relief."