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"No tax breaks will push UK developers abroad"

"No tax breaks will push UK developers abroad"

According to Realtime Worlds Canada is now a far more attractive place for expansion than the UK.

Realtime Worlds, the developer of upcoming All Points Bulletin and one of the UK's most notable games studios, believes that the refusal of a tax break for the games industry yesterday may push companies to move abroad.

The comments come in reply to Chancellor Alistair Darling, who today fulfilled expectations by failing to provide tax breaks for the games industry despite strong lobbying from trade groups such as ELSPA and TIGA.

"If it is right to provide tax relief for the UK film industry then it is also right to provide tax relief for the UK videogames sector," said TIGA's Richard Wilson yesterday, highlighting that the games industry in the UK was larger and more profitable than the UK film business and that it was important to encourage expansion of the medium within the UK.

In reply to the refusal of a tax break, Realtime World's studio manager Colin MacDonald told Develop that it was a massive disappointment and that studios may choose to expand to other countries which provide more favourable conditions, like the US or Canada.

No-one can dispute that the industry is growing. There are a lot of jobs still to be created, as well as IP and value – and today’s decision means the majority of that isn’t going to happen in the UK," he said.

We’ve created 300 jobs since setting up in 2002. If we were to create another 300, we’d have to look overseas – and I doubt that discussion would fall favourably on the UK. I think that goes for across UK development now.

“When you look at Canada, without the tax break here, it’s a tough argument for the UK to win.

Let us know your thoughts in the forums.

16 Comments

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Xtrafresh 10th December 2009, 11:18 Quote
Bah. Why would they need a tax break? Can't they feed their families? If profit margins is all they care about, they should go to India and recruit 10 year old boys.

I also want a tax break!
Landy_Ed 10th December 2009, 11:20 Quote
No different than any other financial challenges in the IT sector. Outsourcing for financial reasons has been a reality for some time now, and while it irks me, I have no plans to move but would do so if it made sense to.

However, if it really makes that much of a difference, how do developers get started in the first place? what is changing in the model when upsizing that it becomes no longer viable to operate in the UK if the conditions have not actually changed? I'd understand if they were suddenly getting hammered for something new (like IR35 for the smaller companies & sole operators) but if the economies of scale become inverse, why expand at all?
Centy-face 10th December 2009, 11:26 Quote
The key thing is that many other nations have given tax breaks to create jobs its not about the games and profits so much and it's quite stupid to give a less profitable income generating industry a break and not a more sucessful one. There was a day when all the best developers were uk based. Still as a games player I am much more interested in what is being done in Russia and eastern europe than what is coming out of the west.
Hustler 10th December 2009, 11:35 Quote
“When you look at Canada, without the tax break here, it’s a tough argument for the UK to win.


Yes, because you must always put money before country..........
digitaldave 10th December 2009, 11:45 Quote
the current bunch are unfit for purpose, whilst I do not necessarily agree on tax breaks I can see them giving away all our growing industries.

London was the banking capitol of the world, they have just given that away and we will never in our lifetime witness a time where we need these successful business's more than we do now.

im still calling treason
leveller 10th December 2009, 11:58 Quote
instead of thinking of tax breaks as a way for a business to grab onto their profits, think of it as an incentive to keep the UK games industry buzzing with the best talent and best opportunities.

if we lose devs to other countries, the next generation of kids will be thankful to get jobs in call centres to afford games dev'd in other countries.

and let's not single out games development either, ALL tech industries should be benefitting from tax break incentives to employ and train UK talent.
Xtrafresh 10th December 2009, 12:16 Quote
Quote:
Originally Posted by leveller
instead of thinking of tax breaks as a way for a business to grab onto their profits, think of it as an incentive to keep the UK games industry buzzing with the best talent and best opportunities.

if we lose devs to other countries, the next generation of kids will be thankful to get jobs in call centres to afford games dev'd in other countries.

and let's not single out games development either, ALL tech industries should be benefitting from tax break incentives to employ and train UK talent.
This is exactly the kind of reasoning that makes me so ill of the whole corporate mindset. If employment is so important, corporations should also contribute by staying in a country they claim they care for.

It's not like anybody is beating them out of England with a stick, there's just a little more money to be made elsewhere. Had there not been profitable conditions overseas, they'd been perfectly happy to conduct their business in the UK.
shanky887614 10th December 2009, 12:17 Quote
well i kind of doubt it will stop it for example it is quite easy to make a game it just takesa a very long time to make and even longer to debug thats why the large companies have so many employees becasue the more people that work on it the qquicker they can fix errors and bring the game out
leveller 10th December 2009, 13:01 Quote
Quote:
Originally Posted by Xtrafresh
This is exactly the kind of reasoning that makes me so ill of the whole corporate mindset. If employment is so important, corporations should also contribute by staying in a country they claim they care for.

I don't support business leaving the UK. I don't have a corporate mindset either, quite the opposite. However I do understand what the news story means to the UK.
Adnoctum 10th December 2009, 13:22 Quote
I support public subsidies for television and film production. Why?

It is important that a nation has a way to make its voice heard and its stories told. It is important, and not just for nationalistic/jingoistic reasons, that you can hear people speaking in your own accent talking about things and events that matter to you.
In English speaking countries it is too easy for a broadcaster to buy American media (whose production costs have already been mostly or entirely covered by the initial American broadcaster) cheaply, drowning out local content that is naturally going to be more expensive.
IMO, it is a fair and good use of PUBLIC funds.

OTOH, when was the last computer game that told a distinctly British story in a British voice (I'm not talking about character accents here, people!)? It seems that a game can't succeed unless it is pandering to an American audience, or at least that is what our developers are telling us with their generic titles.
TWeaK 10th December 2009, 14:41 Quote
@Adnoctum

First one that comes to mind: Conker's Bad Fur Day. I know it was ages ago, and I know Rare haven't made much since, but I love that game.
Aragon Speed 10th December 2009, 17:06 Quote
TBH I no longer care. The UK has been screwing it's citizens over for so long, how will we notice any difference any longer?
hyperion 10th December 2009, 18:23 Quote
If other countries provide more favourable circumstances for devs to work in, then I think the government should try to make the domestic conditions a bit more competitive. I don't like the idea of anyone but me getting tax breaks either, but to let that kind of thinking affect our view on an entire industry is kinda selfish imo. Surely there must be more benefits in maintaining an entire industry than the tax £ they save. Besides, as long as the companies stay here they're still paying UK taxes even with the tax breaks. If they go to Canada they pay Canadian taxes, so how is that better for the UK? Patriotism has nothing to do with it. It's only common sense to go where the more favourable circumstances are.

And if the film industry gets tax breaks, all the more reason...
Veles 10th December 2009, 21:09 Quote
Quote:
According to Realtime Worlds Canada is now a far more attractive place for expansion than the UK.

Not just for developers either, I wouldn't mind "expanding" in Canada
SNIPERMikeUK 11th December 2009, 12:48 Quote
Another reason why the UK econemy is to get worse, eventually everything will move abroad and we will be reduced to manual labour sweat shops....
fatty beef 11th December 2009, 14:01 Quote
Quote:
Originally Posted by SNIPERMikeUK
Another reason why the UK econemy is to get worse, eventually everything will move abroad and we will be reduced to manual labour sweat shops....

Its just as bad in the states. Chicago cant pay their bills even though they have the highest sales tax in the USA. Haha heres how property tax is calculated: Assessed Value (usually 1/3 of Market Value); multiplied by a Value Percentage for the area (25% for example); minus Homestead Exemption ($4500 in Chicago) or Senior Exemption; then multiplied again for your particular Taxing District.

The county in Illinois with the "most disposable income" per citizen on average had their water commission "misplace" 30million dollars. Thats JUST the water commission, does not include the regular government business. Awesome.

Its not that I think there should be no taxes. There are services that the government provides, such as infrastructure, natl defense, prisons, and so on and so forth that need to be paid for some how. But when you need a tax attorney to pay your bills and file your taxes theres something wrong with the system. Having a complex one like both the UK and the US is an easy way to "misplace" funds, redistribute wealth and reallocate resources depending on the fancy loop hole you find.

If everyone paid a fair tax at the same rate and our governments disclosed exactly where the $$$$ went with out a 2200 page law you need a staff of 20 to decipher I think we would all be better off and the issue of jobs leaving or staying would be much easier to address.
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