Partner Article

The game is afoot

Dr Richard Wilson, CEO of the trade association that represents the UK’s game industry, shares his thoughts on what is needed to secure the future of the industry.

When Chancellor George Osborne used his Budget speech to announce his intention to introduce tax relief for the UK games industry there was a collective sigh of relief from TIGA – the association that represents the games industry – its members, and the wider developer and digital publishing community. It was the culmination of years of campaigning for tax breaks that are necessary if the UK is to compete with countries such as Canada, France and the USA which have already established generous games industry tax regimes at the national or regional level.

Since 2006, the UK has fallen from third to sixth in global development rankings. Between 2008 and 2011, employment in the sector fell by over 10 per cent and investment by £48 million. Additionally, many highly skilled developers migrated to jurisdictions offering generous tax breaks. However, with TIGA’s success in lobbying for the introduction of tax breaks, due to come into force in April 2013, there is now a real opportunity to reverse these damaging trends.

Lobbying the Government and Parliament about industry issues and guiding them from proposal to legislation is a complex and time consuming process. Although the political will to offer greater support to the games industry now exists – initially estimated to be worth around £50 million over two years – the exact details of the tax relief are yet to be finalised. This is where TIGA really comes to the fore.

It is our role as a trade association to represent and amplify the views of our members, from the smallest mobile and social games developer start up to the more established veterans of the video games development community. TIGA has moved swiftly to prepare itself and its members for the crucial consultation period with the Ministers and civil servants of the Treasury which is now underway.

Since the Budget announcement, TIGA has attracted new members who have recognised the important work that we have undertaken on the issue of tax relief and are eager to have a say in shaping its outcome. We are interested in hearing the views and opinions of all of our members to ensure that the eventual tax break will be effectively designed and easy to access for UK developers.

The tax relief that TIGA proposed this year was wider in scope and eligibility than ever before as we want a tax credit that supports games developers of all sizes working on all types of platforms. We envisage a system that will be very similar to the UK Film Tax Relief; comprising a cultural test and two tiers of tax relief. The first tier could give smaller studios that produce games with budgets of £50,000-£3 million access to a 25 per cent tax credit while the second tier could give larger developer-publishers, producing games with a budget of over £3 million, access to a 20 per cent credit. The precise details are still to be determined and the opportunity exists to devise a tax relief which will benefit a wide range of studios working on different budgets for games.

There is no doubt that the UK games industry has a well-respected heritage and an innovative and talented workforce but what we have been lacking recently is a tax environment that is desirable to global investors and publishers. Yet with the tax relief in place, the UK games industry will be able to regain some of the ground it has lost to global competitors in the last few years.

It is imperative that we do not lose the impetus that we have gained this year. We must keep the issue of games industry tax relief alive in the eyes of the media, industry and policymakers and seize the opportunity for change. TIGA is committed to stay the course and with the input of our members and the wider industry, we can create a tax relief that has the potential to bring investment and jobs back to the UK games industry. The game is afoot.

This was posted in Bdaily's Members' News section by Richard Wilson .