No Tax Breaks for UK Games Industry… Yet

2 11 2007

Margaret Hodge

Margaret Hodge spoke at the ELSPA AGM during the London Games Festival last week, and ruled out any tax breaks for UK developers. There’s been quite a bit said about it of course, and the most comprehensive piece is this Develop one.

It’s not an out and out veto, and she makes some fair points:

“From my perspective, the one word that I hear the most from the industry is ‘Canada’, but as you all know the issues are bigger than one country. While Canada may be the current challenge to the UK industry, it could just as easily move to somewhere else in the next couple of months,” she said.

She then rebuffed the notion that the UK could adopt its own tax breaks, adding that the industry itself is split over the matter – ELSPA has reportedly signed up to a rejection of the approach to tax breaks which vets eligible projects based on their cultural relevance.

It remains a hot issue though:

And the Government’s now seemingly unsure (and, as some attending the seminar said later on, uninformed) stance on the development tax credits topic grated with the many development bosses in attendance, especially when she argued that in the short-term Quebec’s own generous tax environment will disappear. Famously, Quebecois authorities have guaranteed such credits, including highly-publicised deals cut with Ubisoft, for the coming years.

The stance didn’t convince those in attendance yet Hodge remained adamant it was a short-term threat, eventually telling fellow panelist David Braben, who admitted that two Canadian organisations had pitched the idea of him setting up a studio in the country, to “take your studio to Canada, then – because you’ll be back in a few years” during a heated panel discussion.

This MCV piece also quotes her offering some advice to the industry on PR:

“To deal with other negative MPs, I suggest you set up an all-party group. Find some MPs who understand your business. Get them on board and working for you within Westminster.

“And to ensure a sensible discussion about social responsibilities, I would also encourage you to get closer to the children’s charities.

“But as for criticism from the media, well don’t be so surprised. You’re a competitor of theirs aren’t you?”

It also links to full video of the AGM.

Overall the signals Hodge has given seemed mixed and have displeased a lot of developers, but as this gamedaily.biz article points out at the end:

A spokesperson contacted us to let us know that “Margaret Hodge hasn’t ruled out the idea of a tax break for the computer games industry in the U.K. She is looking at what else can be done to help to industry but hasn’t ruled out tax breaks.”

Overall, she was emphatically pointing out that putting tax breaks in place isn’t going to be easy. It seems the industry has a lot to do before making an kind of tax breaks a reality, and not least of all that will involve better organisation within the games industry in order to present a united public front.

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