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Tax relief for cancelled games projects?

TIGA, the trade association representing the games industry, said today that games worked on by developers but which are cancelled by traditional publishers before the project is complete should in principle be eligible for Games Tax Relief.

TIGA research in 2011 showed that 22 per cent of UK developers have had publishers cancel a game before it is completed.

Dr Richard Wilson, TIGA CEO, said: “Some publishers have been known to leave studios high and dry by obliging them to maintain teams of developers for months on end, only for them to finally cancel projects. This can have damaging repercussions for the studios in question.

“Just as some expenditure on unreleased films qualifies for film tax relief, so cancelled game projects should in principle be eligible for Games Tax Relief.

“This is consistent, fair and reasonable. Provided that the game in question would pass the cultural test and is demonstrably intended for release then it should in principle be eligible for Games Tax Relief.”

Jason Kingsley OBE, TIGA Chairman and CEO and Creative Director at Rebellion, said:“Games Tax Relief is designed partly to promote the creation of new content.

“By enabling developers to claim Relief on cancelled projects, the viability of studios will be enhanced. Studios will have more confidence to develop and pitch new IP to external publishers, or experiment with more direct to consumer business models.

“TIGA will be contacting Government officials to emphasise these issues and to seek clarity of guidance on these points

TIGA has proposed to the Government that:

a) all work involved in the Pre-Production phase onwards should qualify for Games Tax Relief. This involves work on a Technical Design document (which analyses the programming and technical issues involved in making the game) and a Games Design document (which is analogous to the script in a film production and includes a budget for the game, sales estimates and a target platform);

b) all work involved in the production of a playable prototype onwards should also qualify for Games Tax Relief. The production of a playable prototype acts as a functioning working model for the eventual game and addresses the key technical and design issues of the game, and so should qualify for Games Tax Relief, together with expenditure accrued after this phase.

This was posted in Bdaily's Members' News section by TIGA - The Independent Games Developers Association Ltd .