UK govt explains lack of tax breaks for games

Written by Joe Martin

December 22, 2009 // 12:13 p.m.

Tags: #elspa #government #industry #labour #tax #tax-break #uk-govt-explains-lack-of-tax-breaks-for-games

ELPSA director-general Michael Rawlinson has explained why the UK government rejected proposals for tax breaks for the UK games industry, based on conversations he has had with the Treasury department.

The idea of a tax break for the UK games industry, similar to those given to the smaller film industry, was proposed and quickly shot down by government officials in the last month. Since then UK developers have hinted that they may look at moving abroad.

The reason for the rejection was apparently that the UK government was "unconvinced" by arguments that the lack of a tax break may force companies to move overseas.

"The evidence said that if fiscal measures weren't put in place, the industry would decline and the skilled workforce would leave the British economy lock, stock and barrel," he told GI.biz.

"If there were 3000 jobs lost to Canada that was 3000 people that were no longer going to be employed in the UK. And the Treasury said they didn't believe that would be the case. They thought a reasonable proportion of those people would go and find other jobs using their skills in the British economy. Therefore the overall effect to the British economy would not be so devastating."

Rawlinson explained that the proposal was "not dead", though it was off the table for the moment and he was surprised that the proposal was rejected.

"The Government are investing in our sector and in videogames directly and we need to look at ways we can extract more value from that relationship. We can't necessarily expect a continuation even if Labour stay in power, so we need to be on the front foot. I'm meeting regularly with ministers from different departments to explore ideas with them and their officials."

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