George Osborne’s minor changes to tax relief for British video games studios and developers are welcome but an absence in Budget 2014 of a green-light for the scheme is “disappointing.”
The view of TIGA, the trade body for the UK’s computer games industry, reflects the fact that while the chancellor last week made some tweaks to the relief, he was unable to wave it through.
TIGA warned: “Ultimately, until the measure, which would decisively reduce the cost of games development in the UK, is approved and implemented, the UK video game industry will not be competing on a level playing field in the global video game market.”
The trade group explained that although the relief scheme was announced for the UK in 2012, its roll-out has been delayed because the European Commission is yet to decide whether it should be allowed.
Although a decision from Brussels was described by the UK’s creative minister on the eve of the Budget as “imminent”, the commission must be convinced that the relief would amount to a boost to British or European culture, in order to approve it.
As to its likely effect on British culture, TIGA is in no doubt. Employment in the UK games sector shrunk by 7% between 2008 and 2012, and annual investment fell by £30m in 2012 when compared to 2008.
An all-clear for the scheme should also help combat what the group called a “brain drain.” In particular, TIGA says 41% of the jobs lost in the UK sector between 2009 and 2011 went to overseas locations, where tax breaks or similar support for games firms is already on offer.
“In spite of the lack of a definitive update on GTR, there were encouraging signs for our industry in this Budget, not least the UK Government’s on-going support for the measure, and commitment to securing a green light from the EU commission,” said TIGA’s boss Dr Richard Wilson.
“[Our] campaign for Games Tax Relief (GTR) will go on. We stand ready to
provide further evidence to the Government and to the EU Commission to make the
case for this vital measure and to advance the interests of developers and