UK Gaming Industry Calls For Tax Breaks

by Robert Lee, Tax-News.com, London

14 October 2008

The gaming industry in the UK has called on the government to grant it more tax concessions in order to give gaming companies a fair chance of competing with their foreign counterparts.

The industry claims that currently, the government takes GBP130m of the GBP400m revenue generated by the gaming industry via corporate tax and VAT - before the taxes of those employed by the industry have even been taken into account.

The industry says that its arguments are validated by an Oxford Economics study of the sector which has concluded that, due to the vast number of jobs created by this sector and the large profit margin it provides, there is a need for the government to consider relieving games specialists of their heavy tax burdens.

Richard Wilson, CEO of Tiga - a body which represents the business and commercial interests of games developers commented:

“This report confirms that the UK games development sector makes a significant impact on the economy in terms of employment, contribution towards the UK’s GDP and in respect of tax receipts to HM Treasury. Equally important are the facts that the games industry’s R&D activities spill over into other sectors and that video games contribute to the culture of the UK, reinforcing awareness of our technological reputation and in some cases even promoting tourism.

“The UK games development sector has inherent strengths including a highly qualified workforce (80-90% of a typical Tiga member’s workforce are qualified to degree level) and experienced management teams (42% of Tiga members’ organisations have been in business for six years or more). This enables our industry to create high quality games on time and at great value.

Wilson concluded:

“The UK Government and the Scottish Parliament have an opportunity to build on the intrinsic strengths of the video games development sector by introducing a tax credit for games production. If this measure is adopted then the UK games sector will continue to make an important contribution to the UK economy in respect of employment, GDP, tax receipts and R&D and cultural spillover effects."

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