TIGA Delivers Improved R&D Tax Credits in the Budget
TIGA secures decisive victory for UK video games industry
TIGA, the trade association representing the UK Games Industry, successfully convinced the Chancellor to improve the existing R&D tax credits in today’s Budget. TIGA built the argument for enhanced R&D tax credits over the last year in three separate reports and in meetings with MPs, HM Treasury and Government.
TIGA described the announcement by the Chancellor to enhance the R&D tax credits as a ‘decisive victory’ for the UK games industry. However, TIGA condemned the Government’s failure to introduce Games Tax Relief as a ‘dismal decision’ which would leave the video games industry swimming against the tide internationally.
On R&D tax credits, Dr Richard Wilson TIGA CEO stated:
“This is a decisive victory by TIGA which will benefit not just the UK games industry but also the wider UK economy. TIGA’s proposals for the R&D tax credits will deliver 60%-75% more value to games studios than the current R&D tax credit regime. This could be worth around £7 million to the UK video games industry. This will enable studios to invest more in R&D, generate and retain new IP, and hire more development staff. Reforming the R&D tax credits along the lines proposed by TIGA will help power our high technology industry forwards.
“The reform of R&D tax credits in today’s Budget is the decisive victory that TIGA has campaigned for. Government Ministers are to be congratulated for backing our proposal. The Labour Party, the SNP, NESTA and the House of Commons Scottish Affairs Committee also deserve full recognition for helping to achieve this crucial measure. TIGA now looks forward to working with the Government and other interested parties on implementing the changes to the R&D tax credits.”
On Games Tax Relief, Dr Richard Wilson said:
“Conversely, the Government’s failure to deliver TIGA’s Games Tax Relief is a dismal decision that displays a complete lack of imagination and one which will leave the UK video games industry swimming against the tide internationally. Our key competitors have tax breaks for games production. The UK does not. Competitor countries including Canada are surging ahead while the UK is struggling: between 2008 and 2010 the Canadian games industry grew by 33% while the UK sector declined by 9%.
“TIGA’s Games Tax Relief would increase employment, investment and innovation in the UK video games sector. Over a five year period Games Tax Relief would create or protect 9,519 direct and indirect jobs (including 3,366 jobs in the games industry), £431 million investment in development expenditure and £394 million in tax receipts to HM Treasury. TIGA’s Games Tax Relief is supported by the Scottish Government and has cross-party support at Westminster. TIGA will continue to campaign for this crucial measure.
“Reforms to the R&D tax credits are very positive and will benefit the UK games industry. However, only the introduction of Games Tax Relief will put the UK on a level playing field with our overseas competitors. Games Tax Relief would be the real game changer for the industry.”
On other announcements in the Budget, Dr Richard Wilson, said:
“The Government’s changes to VCT and EIS are positive and something we have argued in favour of for a long time. We hope that these reforms will enable more game developers to access project finance. We also welcome the further reduction in corporation tax announced today and the measures to reduce regulation on small businesses.
The Export Credits announced today might help games businesses depending on how they are formulated. “TIGA campaigned for measures to support regional games clusters and we wait with interest the detail of the Enterprise Zones announced today.”
Jason Kingsley, TIGA Chairman and CEO and Creative Director of Rebellion, said:
“The changes to the R&D Tax Credits system are most welcome and will enable the industry to invest more in R&D. At TIGA we made a compelling argument for change in our reports and in our meetings with Government. We are delighted the Chancellor has adopted our proposals in today’s Budget.
“The decision to exclude Games Tax Relief from the Budget though continues to leave Britain in an uncompetitive position internationally. If we are to match the highly skilled economies of the Western world then we need to invest in the high-tech, highly skilled creative industries, such as the video games sector.”