UK gov't considers game dev tax breaks

When Canada replaced the UK as the third-biggest producer of games last year, it seemed obvious that the country's wooing of the fledgling industry by providing lucrative tax breaks was working. The picture doesn't look so rosy this side of the pond, however. The UK has seen the number of independent studios shrink from about 400 in 2001 to around 150 today, according to figures from Tiga, the trade association for UK developers.

The director general of the European Leisure Software Publisher's Association, Paul Jackson, agreed. He told the press recently, "The Canadians have driven a tank over the French Citroen and have now parked on our lawn. It is becoming very challenging to keep core development studios here." Earlier this month, French prime minister Francois Fillon announced that a similar scheme was soon to be operational in France.

The UK government has now released an official statement on the issue in a bid to reassure those who work in the industry that it takes them seriously. It concludes, "The government must be mindful of the need to ensure fair competition and value for money for tax payers whilst ensuring that any tax incentives are supported by evidence. The government is conscious of the recent approval of a cultural tax relief for games in France and is working with the UK industry to collect and review the evidence for introducing such a credit in the UK."

The statement came in response to a petition posted on the 10 Downing Street Web site for tax credits to be given to UK game developers. It pointed out that with costs to produce games in Canada being up to 40 percent cheaper, many gamemakers have been enticed to set up shop over there instead. It argued, "We need the same to support UK talent in this industry that is expected to grow phenomenally in the next three years, but with rising costs in development more staff are required and it is increasingly less attractive to fund these larger projects here, and almost impossible for independent studios to start production."

The petition received 2,175 signatures before the deadline of May 3.