UK gaming tax breaks 'four years away'

The UK games industry has had tax breaks at the heart of its lobbying campaign for as long as it has had the resource and desire to lobby government. With the continuing "brain drain" to Canada thanks to that country's fiscal incentives, UK game-development trade body TIGA thought it had secured a major victory when the Labour government included targeted tax relief for video game development in its final budget. Unfortunately this was cancelled and labeled as "poorly targeted" by the incoming coalition government, and it now looks like the issue is going to be off the table for some time to come.

While Ed Vaizey, Minister for Culture, Communications and Creative Industries has previously indicated his support for targeted tax relief and spoken at high-profile events in support of the industry, he has now poured cold water on any hopes tax relief could be resurrected in the near future. Speaking in the Culture, Media and Sport select committee, he indicated it would be several years before the issue would be back on the table and that he encouraged TIGA to explore other options.

Longtime parliamentary gaming advocate Tom Watson raised the issue saying that "video games are the dominant art form of this century," and pointing out the UK industry had seen significant declines at a time of global growth. Watson highlighted recent figures from TIGA pointing out that in the past two years, UK developer headcount has dropped 9 percent, while in Canada the number of people working in game development has risen by 33 percent. He also suggested that the Canadian industry incentives may well break international competition regulations, though Vaizey indicated that this had been investigated by the previous government and that there "there wasn’t any mileage in that allegation."

Vaizey said that if the industry focused on tax relief in its lobbying efforts, that "could mean a hiatus for three or four years [or more] before it realistically comes back onto the table." In the same meeting, Vaizey did say that "there are other ways we can support [the games industry]," pointing to regional growth funds and raising the possibility of "direct support" from the Department for Business, Innovation and Skills. When asked if a tax break was completely off the agenda, he said he would "encourage TIGA in particular to look at other creative options."

GameSpot UK recently spoke to Tom Watson and John Whittingdale MP, cochairs of the all-party group on video games, as well as Richard Wilson, CEO of TIGA. For their views on the future of government support for the industry and the progress that has been made in the past year in increasing the prominence and awareness of the industry in parliament, check out the video.