UK games industry’s tax break plea to Salmond

Britain's video games trade body has pleaded with Alex Salmond to press Westminster over proposed tax breaks for the industry. Picture: Contributed
Britain's video games trade body has pleaded with Alex Salmond to press Westminster over proposed tax breaks for the industry. Picture: Contributed
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SCOTSMAN GAMES: Britain’s video games trade body has called on First Minister Alex Salmond to press the UK Government into action over delays to a tax break for the nation’s games industry.

Dr Richard Wilson, the CEO of the Independent Game Developers’ Association (TIGA), has urged the leader of the Scottish Government to lean on his counterparts at Westminster to end uncertainty surrounding European approval of the long-awaited initiative.

In his letter to Mr Salmond, Dr Wilson said that in Scotland, the tax relief initiative would safeguard and grow several hundred jobs, as well providing £12m in investment and a further £11m in tax revenues.

Ten months have passed since the European Commission announced an investigation into the tax relief scheme, first announced by chancellor George Osborne in March 2012.

Amid concerns that projects are being stalled by publishers concerned over the outcome of the probe, TIGA is hoping political pressure will bring an end to the waiting.

The measures, which were due to come into force last April, include a 25% tax relief rate on up to 80% of a game’s budget on the proviso that the title is designed and produced in the UK.

TIGA believes the scheme will provide parity with other nations that have buoyant games development industries, such as Canada and France.

However, the EC has said its investigation was necessary given there was “no obvious market failure” that stood to be addressed by the initiative.

Tax relief, Dr Wilson believes, would enable the entire industry in Scotland - around 96 games companies according to the Scottish Games Network, the trade body for Scotland - to “take more risks and create more new and original titles.”

His letter states: “Scotland has a renowned position in the rich history of the UK video games industry, and has contributed massively to the artistic, creative and technological heights the medium has reached in recent years.

“The games industry in Scotland also continues to make a valuable contribution to the economy at both local and national level. In Dundee alone TIGA estimates there are nearly 40 development studios and publishers, as well as nearly 10 other businesses providing consultancy, technology and support services.

“Scotland has produced a series of industry transforming products and businesses, from the ZX Spectrum to Rockstar North, and many top Scottish studios like Denki continue to lead the industry in the rapidly growing social and mobile gaming sectors. Games tax relief will give a powerful boost to the Scottish video games industry.”

Dr Wilson adds: “I would be very grateful if you could the express the importance of games tax relief in your discussions with the UK Government and ascertain what concrete action the UK Government is taking to ensure that the European Commission will give the green light for the introduction of games tax relief as soon as practically possible.

TIGA, which has also written to Mr Osborne over the same issue, said that across Britain, the scheme would generate £188m in investment expenditure by studios and boost the industry’s contribution to the UK GDP by £283m.

Last week, Prime Minister David Cameron told the House of Commons that he was “hopeful” of good news regarding the EC investigation soon after the matter was raised by Jim McGovern, the Labour MP for Dundee West.