UK Games Industry Faces Relegation from 'Premiership'
Other countries benefit while UK fails.
UK video games industry developer body, Tiga, has carried out research along with lawyers Osborne Clarke and concluded from it that the local development community could 'slip out of the premiership' without government support.
In a lengthy statement issuing yet another call for government off the back of the research Richard Wilson, CEO of Tiga, said, "If we want the UK games industry to remain in the premiership the Government must act. An announcement in the 2009 Budget to introduce a 20% tax break for games production would be a welcome start. This is similar to the EU approved French regime that applies to games that pass a cultural test.
"With a tax break of this kind in place, an additional £220 million could be invested, creating a further 1,600 high quality jobs over five years. This tax measure would also help to level the international playing field. If the Government sits on its hands and does nothing, investment in the industry could fall by up to £180 million and nearly 1,700 jobs could be lost over the same five year period.”
There doesn't appear to be anything in the research that directly suggests UK games companies echo the sentiment that they are falling from the premiership, but apparently 85% back tax breaks on games production, 77% wanted more liberal research and development credits, 51% want lower corporation tax and 50% want lower national insurance contributions.
Tiga states that, having fallen from being third to fourth largest revenue-producer among games industries in 2007, the UK will drop again to fifth in 2009. SPOnG does not know exactly how large the games industry premiership is, but by Tiga's reckoning it presumably accommodates four countries.
Tiga and Osborne Clarke (a games-focused law firm) also pointed at independent film as an example of how UK creative industries can benefit from financial support. They cited the Oscar success of Slumdog Millionaire, which was partially funded by the government. The pair state that the UK film industry would be an astonishing 75% smaller if it weren't for tax relief, although no source for that figure was given.
It was stated that a "French style tax break for games" would cost the treasury £150 million over five years. That's compared to the £600 million Tiga and Osborne Clarke reckon it costs the government for UK Film Tax Relief.
The finger was also pointed at education. Wilson stated that standards should be improved in the teaching of maths and science at school, while more flexibility should be added to the national curriculum to facilitate the teaching of computer science. Further to that, Wilson said that games industry careers should be promoted at school, suggesting that it would encourage students to stick with science, technology, engineering and maths subjects.
Wilson also had suggestions for higher education, saying “In higher education, tuition fees for mathematics and computer science students should be reduced in order to increase the supply of graduates in these areas. Additionally, our universities must be adequately funded. Cuts in computer science courses should be reversed."
He also said that Tiga should be involved, adding, “The Government should also consider establishing a Tiga managed Games Education Fund which could promote industrial secondments, research fellowships, and education outreach and knowledge transfer programmes. This would not only strengthen links between developers and academia. It would also help to enhance the competitiveness of the UK games development sector.”
You can see the full list of demands, complete with more facts and figures, here.
Full release here.
In a lengthy statement issuing yet another call for government off the back of the research Richard Wilson, CEO of Tiga, said, "If we want the UK games industry to remain in the premiership the Government must act. An announcement in the 2009 Budget to introduce a 20% tax break for games production would be a welcome start. This is similar to the EU approved French regime that applies to games that pass a cultural test.
"With a tax break of this kind in place, an additional £220 million could be invested, creating a further 1,600 high quality jobs over five years. This tax measure would also help to level the international playing field. If the Government sits on its hands and does nothing, investment in the industry could fall by up to £180 million and nearly 1,700 jobs could be lost over the same five year period.”
There doesn't appear to be anything in the research that directly suggests UK games companies echo the sentiment that they are falling from the premiership, but apparently 85% back tax breaks on games production, 77% wanted more liberal research and development credits, 51% want lower corporation tax and 50% want lower national insurance contributions.
Tiga states that, having fallen from being third to fourth largest revenue-producer among games industries in 2007, the UK will drop again to fifth in 2009. SPOnG does not know exactly how large the games industry premiership is, but by Tiga's reckoning it presumably accommodates four countries.
Tiga and Osborne Clarke (a games-focused law firm) also pointed at independent film as an example of how UK creative industries can benefit from financial support. They cited the Oscar success of Slumdog Millionaire, which was partially funded by the government. The pair state that the UK film industry would be an astonishing 75% smaller if it weren't for tax relief, although no source for that figure was given.
It was stated that a "French style tax break for games" would cost the treasury £150 million over five years. That's compared to the £600 million Tiga and Osborne Clarke reckon it costs the government for UK Film Tax Relief.
The finger was also pointed at education. Wilson stated that standards should be improved in the teaching of maths and science at school, while more flexibility should be added to the national curriculum to facilitate the teaching of computer science. Further to that, Wilson said that games industry careers should be promoted at school, suggesting that it would encourage students to stick with science, technology, engineering and maths subjects.
Wilson also had suggestions for higher education, saying “In higher education, tuition fees for mathematics and computer science students should be reduced in order to increase the supply of graduates in these areas. Additionally, our universities must be adequately funded. Cuts in computer science courses should be reversed."
He also said that Tiga should be involved, adding, “The Government should also consider establishing a Tiga managed Games Education Fund which could promote industrial secondments, research fellowships, and education outreach and knowledge transfer programmes. This would not only strengthen links between developers and academia. It would also help to enhance the competitiveness of the UK games development sector.”
You can see the full list of demands, complete with more facts and figures, here.
Full release here.
Companies:
TIGA
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Comments
Was p 2 Mar 2009 18:14
1/2
That's quite a big wish list, they would do better sending it to Santa. What's in it for HMG? Maybe they should highlight some of the plus sides for the rest of the economy, for re jigging the education system to suit games production.
Micah Levy 3 Mar 2009 12:28
2/2
While more assistance for games development companies would be very welcome, it is not uncommon for many games companies to not be taking full advantage of the existing incentive scheme which is the R&D tax credit scheme.
Here are a few common errors that we see games companies make resulting in them under-claiming R&D tax credits:
1. Not including creative staff - frequently a large proportion can be included in the R&D claim providing it is structured correctly
2. Not realising that if they are an SME they can claim R&D tax credits for work that they subcontract out
3. Not taking the effect of the R&D tax credits into account when pricing work that is subcontracted to them by another SME - i.e. if you know that the company subcontracting the work to you can potentially claim 24.5% of the amount back in cash, then you should be incorporating this into your pricing.
Micah Levy
http://research-and-development-tax-credits.com