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Activision, Sony: Lack of UK tax relief is an issue

Activision, Sony: Lack of UK tax relief is an issue

Activision and Sony have said that the lack of tax relief in the UK may be an issue in the future.

Activision and Sony bosses have admitted that the loss of tax relief for the UK games industry may be an issue that could affect future projects, forcing the heavyweight publishers to develop in other countries.

The UK games industry, which has now eclipsed the film industry, was promised tax incentives by Labour before the election, but the plans were cut as part of the 2010 budget by the new Conservative-Liberal Democrat government.

Now, in an interview with the Financial Times, Activision CEO Bobby Kotick said that the loss of tax incentives may prompt the publisher to move future projects elsewhere.

"The talent pool in the UK is among the best in the world for what we do," said Kotick. "But we really need to see some more incentives. We are seeing great incentives in Canada, Singapore and eastern bloc countries."

Sony took a similar point of view, with UK boss Ray Maguire saying that while current projects would continue as they were, future projects may be moved overseas to more favourable financial climates.

"The existing plans will continue but any further new developments would have to be looked at," he said. "Maybe something that was planned for the UK would go abroad now."

Not everyone has taken such a dim view though, with Eidos president Ian Livingston saying that it may be time for the UK games industry to approach the topic in a different way. Speaking at the GameHorizon 2010 conference yesterday, Livingstone said he thought that begging for tax breaks smacked of "an industry in need, desperate for handouts" - which is far from the truth.

"Maybe we need to say to Mister Osborne, 'look, my son: this is a $50 billion industry, a $90 billion industry by 2015, we're very good at making games, we want to be successful at it," said Livingstone, according to GI.biz.

"At the moment things are not that rosy here – even though we've got the talent, we've got the ability to create amazing intellectual property. Why don't you think about perhaps setting up a fund? All we need is some more money up front to be on a level playing field'."

"I'm sure it will be possible, because they must surely realise that manufacturing is on the decline, our national services are on the decline – the way out of this mess is the creative industry, the digital economy, us being in the games industry are surely at the forefront of that. They must see that we are the future."

Let us know your thoughts in [url=http://forums.bit-tech.net/showthread.php?t=190201]the forums[/eurl] - and be sure to check out our 'Made in the UK' series for more information on the UK games industry.

11 Comments

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liratheal 30th June 2010, 12:01 Quote
Not really surprising.

It's crap that our government are sticking to a plan that is likely to see the export of yet more skilled workers. Tax the hell out of the populace, then wonder why everyone leaves.

It's not whether the industry needs it or not, it's whether they have an incentive to stay here - as much as I hate to agree with Kotick, they don't have any incentive to stay here over paying for the employees they want from the UK to move to another country.
[PUNK] crompers 30th June 2010, 12:05 Quote
tbh the UK games industry could have been huge if it was supported properly in the 90's, now that a lot of the major studios have moved on anyway subsidies (should they ever be granted) would be shutting the door after the horse has bolted.

fact of the matter is how ever much money games make a large proportion of the people involved in the UK government see them as a waste of time. Add to that the "age of austerity" and you have pretty much no chance.
Jezcentral 30th June 2010, 12:39 Quote
It didn't even require money in the 90s. Canada was putting their money where their mouth was from 2002 (post dot-com bubble). If Brown had tried investing money like the Canadians did, when his coffers were overflowing, we wouldn't have had this problem.
Tokukachi 30th June 2010, 12:50 Quote
There is no point having tax incentives for the gaming industry in the UK, there are no UK publishers so all you would be doing is giving money away to other countries.

Also if you start playing that game it just becomes a merry-go-round, with the main area's moving all the time, you see it also with the CG(film) industry, the work chases the tax incentives so as soon as you've built an industry up it gone to another country.
AshT 30th June 2010, 13:02 Quote
I though it was a massive publisher that lobbied our .gov to stop the tax relief so that the rest of the world could benefit and we get raped of all our talent ... ?

Would be interesting to see who's bank account received the lobbying cash backhanders ...
TrickOn 30th June 2010, 13:40 Quote
Surely to get tax relief they could just apply for this which they seem to fall into the category of:
http://www.hmrc.gov.uk/ct/forms-rates/claims/randd.htm ?

Then they could stop seeming so whine-y.
Jezcentral 30th June 2010, 18:15 Quote
Quote:
Originally Posted by AshT
I though it was a massive publisher that lobbied our .gov to stop the tax relief so that the rest of the world could benefit and we get raped of all our talent ... ?

Would be interesting to see who's bank account received the lobbying cash backhanders ...
This suspicion seems to be falling on a certain Canadian-based company. Funny that.
John_T 30th June 2010, 18:45 Quote
"Activision and Sony bosses have admitted that the loss of tax relief for the UK games industry..."

There is no loss of tax relief - the tax relief was never there in the first place! It was a proposal that has subsequently been shelved as unaffordable. EVERY industry sees itself as a special case, every industry would argue for tax relief and cite special circumstances and hardships - that doesn't mean every industry warrants it.

I agree with the Eidos president Ian Livingston, that the industry needs to argue its case from a different perspective. That a hugely successful and hugely profitable industry is sticking out the begging bowl, (and essentially attempting blackmail to push their case) is nauseous.

Yes industries that are more easily mobile need to be taxed more carefully, but that doesn't mean they should just be able to avoid it under the threat of them moving elsewhere otherwise. Frankly, it's stuff like that that should be discussed at summits like the G20 - as Neat69 said, if these cash-rich, low labour, low equipment service companies are just allowed to flit from one haven to another, (as different countries rush to the bottom of the pile in order to attract the business) it ends up benefiting no-one but those companies themselves...
shanky887614 30th June 2010, 18:48 Quote
Quote:
Originally Posted by liratheal
Not really surprising.

It's crap that our government are sticking to a plan that is likely to see the export of yet more skilled workers. Tax the hell out of the populace, then wonder why everyone leaves.

It's not whether the industry needs it or not, it's whether they have an incentive to stay here - as much as I hate to agree with Kotick, they don't have any incentive to stay here over paying for the employees they want from the UK to move to another country.

i guess you dont know much about politics

let me explain

under labour the goverment was actually losing money and the while the private sector should be large than the public sector as this allows more money to come into the country this is not the case


and becasue of this and the masive amounts of money being wasted the goverment needs to cut back on things and try to stabilise the economy, if the conservatives are still in power in a few years they will start to do projects like this becasue it will boost the economy
sharpethunder 2nd July 2010, 09:28 Quote
well the uk goverment is lowering corprate tax by 1% each year until 2015. At the moment the tax is set at 25% so every industy in the country is gettig a tax break not just the games industy and it should be the lowest in europe
Fizzban 2nd July 2010, 21:37 Quote
I understand why the government has cut the tax relief idea. But it seems short-sighted to me. Tax relief would create more jobs and revenue from the company's that would want to do business here. I know cuts were needed. But I can't hep thinking that in the long run this cut is a big mistake.
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