UK: TIGA Responds To Rejected Games Tax Proposal

by Jason Gorringe, Tax-News.com, London

30 December 2009

After discussions with the UK government, TIGA, the trade association representing the UK games industry, has responded to the government’s decision to reject its plea for tax relief to support the sector.

TIGA presented a 67-page report proposing its Games Tax Relief during discussions attended by two government ministers, and officials from HM Treasury and the Departments for Business, Innovation and Skills and for Culture, Media and Sport.

Richard Wilson, CEO of TIGA, stated that:

“There are approximately 900 trade associations in the UK. It is rare for a trade association to be officially invited by the government to make a case to change UK tax policy. TIGA was invited to make such a case because of our intensive and influential campaign for Games Tax Relief. TIGA was unique in submitting a substantive, 67-page report, based on original research and drawing on expert advice from organizations including Games Investor Consulting, Osborne Clarke, the Tenon Group, Grant Thornton and Games Audit. This was a serious report produced by serious organizations on a serious subject.”

“Some observers have suggested that our proposal was rejected because the econometrics underpinning it was insufficiently robust. Some at HM Treasury doubted our assumptions that absent Games Tax Relief job losses in the video games industry would be permanently lost to the UK economy, believing instead that workers lost to the industry would simply move to other equally high-technology industries.”

Wilson added:

“A senior civil servant from HM Treasury has confided that, irrespective of TIGA’s arguments, because of the state of the public finances and the parlous state of the UK economy, no commitment to Games Tax Relief could be made. The state of the current political cycle, with a general election fast approaching, created an additional hurdle for TIGA’s campaign to surmount.”

“TIGA’s campaign for Games Tax Relief has yielded real benefits,” Wilson suggested, going on to add that:

“The profile of the industry amongst ministers and policy makers has never been higher. Our campaign indirectly encouraged the government to make its recent announcement concerning investing GBP10m in Abertay University and the center for excellence in Manchester. Above all, the prospects for Games Tax Relief or a similar measure remain possible after a general election.”

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