Games firms target millions in tax credits after Jumpstart deal

COMPUTER games developers stand to save millions of pounds after one of the industry's biggest trade bodies signed a three-year deal with an Edinburgh company that specialises in research and development tax credits.

The agreement between UK Interactive Entertainment (UKIE) and Jumpstart comes in the wake of the Budget decision to rule out a specific tax relief that industry organisations had campaigned for.

Plans by Labour to introduce tax cuts for the games sector were scrapped by the coalition government during its 2010 emergency Budget. Trade associations argued that Britain would lose out to competitors such as Canada, where tax breaks have seen its games industry grow by about a third between 2008 and 2010, while the UK sector declined by 9 per cent.

Jumpstart, which was founded three years ago, has a 31-strong team specialising in presenting "detailed, accurate and compliant" R&D tax credit submissions to HM Revenue & Customs. It claims to have already saved clients in excess of 12 million.

The latest deal will give UKIE members access to a range of services including a tax credit support line.

Jumpstart said companies, particularly smaller ones, faced the "often insuperable hurdles of completing R&D tax credit submissions".

Director Richard Edwards said: "The UK's games industry has proven time and again that it has world-beating potential, but support from government and government bodies have been lukewarm to say the least. R&D tax credits are a notoriously complex area and it makes sense for directors to use the services of specialists, so that they can get on with what they are good at."

Andy Payne, who chairs UKIE and is managing director of games firm Mastertronic, said: "Our new partnership with Jumpstart will provide the practical help needed for all UKIE members to make full use of the R&D tax credit system."

Jumpstart, based on a business model which originated in Canada, turns over some 2.2m. It has 500 clients, including Clyde Blowers and BrewDog, and aims to treble in size each year. Fees are based upon results, with the firm claiming a success rate of almost 99 per cent.

Scotland's computer games industry has had a rollercoaster ride of late. The demise last summer of Realtime Worlds, while not blamed on a lack of tax breaks from the UK government, was a body blow to the Scottish and Dundee video games sectors.

More recently, Rockstar North, the Edinburgh-based games developer, said it was recruiting ahead of the global launch of its latest product, LA Noire.