UK games industry tax breaks promised

"We need to keep British talent in this country," says chancellor; proposed fiscal relief will "completely transform the UK games industry," says Tiga.

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A tax credit for the UK games industry was announced in today's UK budget. Chancellor Alistair Darling aims to keep game development talent in the UK "similar to the steps which are helping restore the fortunes of the British film industry." There will be a "consultation on design" immediately, according to the budget report, with "a tax relief" to follow, "subject to state aid approval from the European Commission."

For once, the UK games industry received praise from the mother of parliaments.

The charge for tax credits has been led by Tiga, the trade body representing independent game developers in the UK. Speaking to GameSpot UK, Dr Richard Wilson, Tiga's CEO, said he was "absolutely delighted" by the news. "It is a really good day for the industry, it's a good day for the economy, and a good day for UK consumers," he said, adding that the offered tax relief "will completely transform the UK games industry."

The tax breaks are intended to keep UK development talent in the UK, according to the chancellor in his parliamentary statement today. "We will not go back to the interventionism of the past," he said, but confirmed that various sectors of the UK industry would receive targeted help. The video games industry was singled out by the chancellor for praise and the promise of help. "This is a highly successful and growing industry, with half its sales coming from exports, and we need to keep British talent in this country," he said.

Darling also announced other measures that will indirectly help the British development sector. The chancellor said he would "secure the recovery" of the economy by offering up a £2.5 billion ($3.8 billion) package to help small and medium-sized businesses. This will be funded by last year's popular windfall tax on banks' bonus payouts, which has already raised £2 billion ($3 billion).

The chancellor also promised to create 20,000 new university places "largely in key subjects like science, technology, engineering, and maths." Decline in science and engineering graduates has been another bugbear for the UK games industry of late and has often been blamed alongside lack of production tax relief as a reason for the UK industry's decline. This will be achieved through one-off £270 milion funding delivered through a "University Modernisation Fund."

The UK games industry slipped from third in the world rankings in 2007 to fifth last year and is likely to slip to sixth--behind the USA, Canada, Japan, South Korea, and China--in 2010. From 2006 to August 2009, investment in privately held UK games companies dropped 60 percent, according to research from the National Endowment for Science, Technology and the Arts. According to NESTA, 75 percent of studio heads said that production tax credits would help them keep original IP in the UK. In the same survey, two-thirds said that such tax breaks would help them create more original IP.

Discussion

41 comments
thenephariouson
thenephariouson

Once upon a time (80's) the UK had some of the most ingenious games developers in the world, with companies such as Ultimate (now Rare), Imagine, Psygnosis, Team 17, Bug-Byte, Elite, Codemasters and many more, these developers were driven by passion and pride and were responsible for some of the best and most imaginative games of their generation, then with the odd exception slowly but surely a majority of these companies faded into obscurity. I really hope this 'Tax Break' turns out to be the catalyst that the UK needs to nurture and harness new developers, thus putting the UK back on the map as a major games developer.

FF_fan2004
FF_fan2004

[This message was deleted at the request of the original poster]

FF_fan2004
FF_fan2004

A friend of mine suggested that Britain should go back to being under monarchy. Basically "Restore Default Factory Setting".

gamestesterjan
gamestesterjan

Oh thank god, its about bloody time. The legislation and recession has been severe on the UK side of the games industry without a doubt. Perhaps now we can see more jobs becoming available as companies slowly come out of administration. Fingers crossed on the junior production roles.

FF_fan2004
FF_fan2004

It still doesn't mean that Labour will get my vote!

Noctisversus
Noctisversus

Change the government should!!! Be more open minded for this country's sake...

KingOfTheNubeis
KingOfTheNubeis

About time ,IT WILL make a difference.Should have been done ages ago so I'm not going to "big up" labour, but the fact that its happening is good.

andalore
andalore

At One Point Didn't we have Wipeout? our government needs to enter 21st Century and accept Games as a Legit form of Media like Movies/Books Etc. and not just something for kids.

Rikudo-Pein
Rikudo-Pein

:( This is why I hate our government... they're all just a bunch of party poopers...

MooncalfReviews
MooncalfReviews

I live in the UK, and even I think this country is falling behind on everything. We used to be the number one on the music scene, even on the film scene back in the turn of the 20th century. But now we're a joke, a freaking laughing stock. Sure, we've got some great gaming developers, but that wont last. The inbreeding on this island kills off any creative talent after a couple of generations.

real_nimrod
real_nimrod

so in the past 3-4 years, the gov has allowed the uk gaming industry to slip and slide, and now an election is coming, all of a sudden they want to do something about it. Me thinks post election who ever is in charge will politely ignore the gaming industry till the next gta :-p

penpusher
penpusher

oh horay,,,theyre planning to give the gaming industry a tax break but they're putting up the tax of low earners like myself...forgive me if I'm not happy with this there are more important things for them to concentrate on ...

kavadias1981
kavadias1981

There are only two kinds of politician: a liar and an even bigger liar.

BonsaiMet
BonsaiMet

Sounds great. Let's just hope it takes effect soon rather than later.

kkee
kkee

Unfortunately, this just seems like pre-election talk, with very little action coming as a result. Expect "long" reviews and consultations into giving the games industry benefits, before a middle of the road decision is made.

Darkman2007
Darkman2007

good initiative, while its not that important, its certainly welcome. anything that promotes education and opens up new jobs is always a good thing.

killzoik
killzoik

this country's going downhill fast...... but this is the first good news in ages, now if only they would cut fuel tax instead of raising it

fps_d0minat0r
fps_d0minat0r

the election in the UK is equivalent to selecting an apple out of a bunch of rotten ones. except rotten apples dont claim expenses which makes them better :p

eastwoodmaniac
eastwoodmaniac

Perhaps someone in the games industry has been having a few meetings with Stephen Byers...

chandlermbing
chandlermbing

I hope gamers over 18 don't become like one of these narrow minded special interest groups who vote purely based on who gives the best lip service to the industry. Tax breaks for games should be pretty low on anyones list of priorites with the all the myriad issues in the country at large.

RTSgames
RTSgames

Narr bad idea, its like EA buying westwood, they will destory gaming problemly.

LittleDuck
LittleDuck

It'll go from GTA IV's pretty damn amazing game to GTA V's masturbate at every second gameplay. Although, more likely, just more developers. So long as the director of design isn't mollenyux (or however you spell that name) I'm game.

enveyur
enveyur

Agree with SadPSPAddict, It will be interesting to see this.

SadPSPAddict
SadPSPAddict

Will be interesting to see what this turns into then :)

heds777
heds777

@tatu2004 Yer they probably will but there guy has said they were going to look into it so if it is already there hopfully they won't touch it.

tatu2004
tatu2004

@heds777 there more likey to scrap it..

heds777
heds777

Brilliant. I hope that the conservatives won't get in the way of this.

finallyalex
finallyalex moderator

@brendanhunt1 A fine question. I'm actually waiting to hear back from the esteemed Mr Vaz... he's not responded to my inquiries so far.

brendanhunt1
brendanhunt1

i wonder what keith vaz has to say about this

daniscool
daniscool

Dr. Richard Wilson? I don't believe it!

Chris-Parker
Chris-Parker

@sebFlyte Very true unfortunatley. Many uk based game developers use foreign based publishers. So whilst these tax breaks are good its not going to stop the Bobby Koticks of this world taking the largest chunk of the proverbial pie thus offering very little to the British economy. That's my extremely uneducated opinion btw ha!

finallyalex
finallyalex moderator

@Chris-Parker you make a fine point. One thing... think about how many of those names are now published by UK-owned companies, and how many of those developers are part of companies based abroad. Other than Team 17, Revolution and Codemasters, the money made off those games almost entirely goes elsewhere.

Chris-Parker
Chris-Parker

This is great news. UK based game developers are some of the most innovative around. I think people forget how many great games come from this part of the world. Just a few from past and present; Eidos - Tombraider, Rockstar - Grand theft Auto, Revolution - Broken Sword, Team 17 - Worms, Splash Damage - Brink, Media Molecule - Little Big Planet, Lionhead - Fable, Rocksteady - Batman Arkam Asylum, Codemasters - Grid, Rebellion - Alien v Predator. Plus many many more! its about time they had some tax breaks, I just wish I could too.

coruscant
coruscant

At least Labour did something good for once.

Hanzoadam
Hanzoadam

I like how in people mainly think games are good in the country

dannyodwyer
dannyodwyer staff

I'm intrigued to see if this also helps to attract studios from mainland Europe. And I suspect many of my friends in the Irish development community are eyeing this up. The corporation tax in Ireland is among the lowest in Europe, but support for SMEs is poor since the recession took hold. Apart from the obvious commercial benifits, it's great to the games being recognised as an influential industry.

dannyodwyer
dannyodwyer staff

[This message was deleted at the request of the original poster]

diabloakaSAHA
diabloakaSAHA

This will be good for Rebellion studios as well , perhaps now we can have an AVP sequel sooner :D