TIGA: UK Tax Breaks Could Spell 1400 New Jobs

UK game industry trade body TIGA backed up its calls for developer tax breaks with a report it submitted to the Department of Culture, Media and Sport today. The report aims to provide the government with detailed data on the benefit of the proposed Games Tax Relief plan, and makes a case for the cultural value of games. Notably, TIGA says a tax break for game developers would create 1400 new jobs over 5 years and "trigger hundreds of millions of pounds in new investment" from growing studios. Specifically, TIGA believes investment by game studios would increase £146m ($239 million) over that five-year period, and tax cuts would actually raise direct and indirect annual tax revenues by £133m ($217 million). TIGA says that employment in the UK games biz fell by 4 percent between July 2008 and July 2009, and that 44 companies -- 15 percent of the total -- went out of business during the same period. The result, according to TIGA's report, is "millions in lost tax revenues," even though global industry sales grew 20 percent year over year in 2008. "The impact of a new brain drain of experienced staff to subsidised studios overseas is beginning to bite, while overseas government support for indigenous games development industries increased as countries including Canada, Germany, Japan and South Korea increased their fiscal support," says TIGA in a statement. On the cultural side, the trade body argues that 60 percent of the UK population plays video games, and "the majority" of people under the age of 16 consider games "the single most important cultural medium." 86 percent of the British public feel that games can be cultural products, TIGA adds. The trade body is hoping the government adapts existing tax relief legislation as it applies to the British film industry to cover games as well. The plan offers three tiers of relief depending on studio size, and products would be subject to a "cultural test" that scores them on criteria of "European heritage and game locations, languages, innovation, narrative, and location of development and key development staff." Under the proposed test, 44 percent of games studied for the purposes of the report would receive relief. "The evidence presented today provides a robust argument for the introduction of a cultural tax break for games production, which will benefit both the UK games industry and also ultimately the wider economy, providing additional jobs, investment and UK tax revenues," says TIGA CEO Richard Wilson. "We hope the Government will work to introduce TIGA’s proposed Games Tax Relief at the earliest opportunity."