Lib Dems would support games tax relief

Hard-up game developers in the UK may well have found a new friend in Liberal Democrat Culture secretary, Don Foster MP, who says that he’s “very sympathetic” towards the case for tax relief for the UK games industry.

His comments come shortly after Stephen Timms, minister for Digital Britain, said that the argument for tax breaks was “getting stronger,” and hinted at an “update” to the situation in next week’s budget.

Speaking to Gamesindustry.biz, Foster said that "I'm much more pro the arguments in favour of the tax break.” However, he added that his party still wasn’t quite committed to putting it in the Lib Dem manifesto. Sadly, it looks as though, the third party is looking to see if Labour will risk putting the tax break in the budget before it makes a firm decision.

"If somehow the government have been able to put the case together to their satisfaction,” says Foster, “personally I'll be delighted and will be doing everything I can to make sure nobody in my party proposes stripping it out again".

So what’s the hold up? “We’re concerned the industry itself is not totally united behind it,” says Foster. He gives the example that there are worries “about the impact of the cultural component – which is necessary to get around European state aid rules - and whether that might have an impact in terms of international sales."

The whole UK games industry might not be totally behind the idea of tax breaks, but apparently the vast majority of its players back the proposal. CEO of UK games industry association TIGA, Richard Wilson, claimed that “our latest research shows that out of a range of fiscal measures that could be introduced to help the UK games industry, the introduction of Games Tax Relief is the most popular, with 85 per cent of businesses believing that it would help their business.”

Jason Kingsley, creative director of Rebellion Studios (the guys behind Alien vs Predator) has also piped up and said that he’s happy to provide as much evidence to the government as it needs to make a decision.

“TIGA has led the drive for Games Tax Relief, commissioned research to support the case and provided a substantive and detailed report on how the tax measure should be implemented,” says Kingsley. “We stand ready to provide any further evidence relating to Games Tax Relief that is required by policy makers.”

Wilson is still chuffed to have the backing of Foster, even if it’s not in the party manifesto. “It is very encouraging to hear that leading Liberal Democrats are sympathetic to TIGA’s campaign for Games Tax Relief,” said Wilson. “It is also very positive to learn that Don Foster would oppose removing the provisions for Games Tax Relief should it be introduced in the forthcoming Budget.”

Speaking to THINQ, Wilson explained that the tax break “would essentially work very much like the film tax credit.” The effect of this, according to Wilson, would be to “encourage more inward investment into the UK games industry, and indeed encourage more investment by domestic providers of capital in the UK games industry.”

In conjunction with more investment in mathematics and computer science education, Wilson says that the tax break will help provide “greater job opportunities,” and maybe even higher salaries. A recent survey revealed that many people in the UK games business felt their pay didn’t cover the cost of living, and it’s hoped that industry growth will help to boost games industry salaries further.

“Would this feed into higher rates of pay?” asks Wilson. “In shortage areas, that would certainly be the case, I think particularly in programming. Because the demand for quality programmers is already strong, all other beings equal, yes, salaries probably will increase.”

Despite pressure from the UK games business, tax breaks for the games industry were notably rejected in last year’s pre-budget report. All will finally be revealed in next week’s budget on 24 March.