Scottish Government welcomes Budget tax relief on video games industry

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By a Newsnet reporter

The Scottish Government and TIGA, the trade association of the video games industry, have welcomed the introduction of a tax break which will help to boost employment and development of the industry.

Announcing the measure during his Budget speech in Westminster on Wednesday, Chancellor George Osborne said:

“Today we also set Britain this industrial ambition – that we turn Britain into Europe’s technology centre. We will start with digital content. The film tax credit, protected in our spending review, helps generate more than £1bn of film production investment in the UK in the last year alone.

“Today I am announcing our intention to introduce similar schemes for the video games animation and high-end TV production industry.”

The decision to introduce tax breaks will create and safeguard as many as 4,661 direct and indirect industry jobs.  Dundee is a significant centre for the games industry, with some 350 companies employing over 3000 staff.

A significant number of other countries also have fiscal incentives in place for their games developers.  France, and a number of US states and Canadian provinces already have tax breaks for video games developers.  The Irish Culture Minister, Jimmy Deenihan, recently announced that the Irish government was seriously considering introducing a tax break for the video games industry.

Dr Richard Wilson TIGA CEO stated:  

“This is a brilliant decision by the Government and terrific news for the UK video games industry. It is also a decisive victory won by TIGA through audacity, determination and endurance. Like a boxer knocked down by his opponent, we refused to accept defeat and kept getting back in the ring. This victory will benefit not just the UK games development and digital publishing sector but also the wider UK economy.  

“Tax relief for the video games sector will increase employment, innovation and investment in the UK video games industry. Our research shows that Games Tax Relief should generate and safeguard: 4,661 direct and indirect jobs; £188 million in investment expenditure by studios; increase the games development sector’s contribution to UK GDP by £283 million; generate £172 million in new and protected tax receipts to HM Treasury, and could cost just £96 million over five years. Tax breaks for games production will ensure that the UK remains at the forefront of video game development. It will also help to rebalance the UK economy away from an over-reliance on financial services towards a high skill, R&D intensive and export focused industry.  

“For Games Tax Relief to be announced in the Budget is the culmination of a four year campaign waged by TIGA. Government Ministers are to be warmly congratulated for this brilliant decision. The All Party Computer and Video Games Industry Group in the Westminster Parliament, the Labour Party and the Scottish National Party also deserve full recognition for supporting this critical measure. TIGA now looks forward to working with the Coalition Government, the Labour Party and the SNP and other interested parties on the implementation of Games Tax Relief.”

Joe FitzPatrick MSP, Convener of the Cross Party Group on Video Games Technology at the Scottish Parliament, has welcomed the announcement by the Chancellor of the Exchequer on plans to introduce video games tax relief.  Mr FitzPatrick wrote to the Chancellor at the beginning of March to press for the introduction of tax measures to benefit the video games industry.

Mr FitzPatrick, the Dundee City West SNP MSP, also predicted a boost to video games developers in their competition with international competitors.

He said: “I have been campaigning on this point for some time alongside Games companies and am delighted to hear the Chancellor is now offering support for the sector.

“Earlier this month I wrote to Mr Osborne urging him to take this course of action, and I explained that Games Tax Relief would, as TIGA suggests, ‘more than pay for itself’.

“This measure will deliver a vital spur for games developers and will generate a good return on the investment. It will sustain existing jobs and could lead to the creation of more jobs as the sector in Scotland expands and develops.

“I am delighted that the Chancellor took into account all the pressure from TIGA, the games sector and the local MPs and MSPs and has now accepted the good financial case for introducing support for the video games industry.”