UK games industry waits for games tax break announcement

The UK games industry is waiting to see whether tomorrow the Government will announce a games tax break in its last budget before the forthcoming 2010 general election.

In his December 2009 pre-budget report, the Chancellor Alastair Darling failed to make any formal announcement introducing a games tax break, despite significant industry support and lobbying for the measure.  At the time, the Government said it felt there was insufficient evidence in support of the benefits of the tax break, particularly in the current recession.  Then, early this year, Conservative MP Ed Vaizey suggested that a games tax break would not be a “top priority” if his party won the election.  That seemed to be an end to the matter.

But, in fact, green shoots have been growing since then.  In February 2010, Labour MP Tom Watson (well known to gamers and this blog as a champion of the games industry) filed a Parliamentary motion requesting the Government to pass a games tax break.  Also in Febuary 2010, the Prime Minister Gordon Brown said that the UK games industry was “leading the way” in Europe as “by far the biggest producer of computer games”. He also added that “there will be new commitments of investment” off the back of this week’s Global Investment Conference in London.

Then, earlier this month, Stephen Timms (Minister for Digital Britain) said to Gamesindustry.biz that the Government would “be able to provide an update of where we’ve got to” regarding tax breaks for the industry on March 24th.  According to the Telegraph, he also said that the government was looking to support businesses that could drive Britain out of recession and that there was “no doubt that the computer games sector is one part of the economy where we can see very good prospects for growth in the future”.

So, hopes are mounting that there may be something in this budget for the games industry.  Really? Fundamentally, there doesn’t appear to have been a sea change in the facts since the Govt last rejected a games tax break, but perhaps there has been enough movement in the right direction (and we are close enough to the election and the consequent need for good news) for the Government to feel able to announce a tax break, the details of which will have to be worked out later on.  Or perhaps it will simply announce a formal consultation into setting up a games tax break, which is perhaps more consistent with Stephen Timm’s quote about providing “an update of where we’ve got to” and reports that the Chancellor has no giveaways in this budget.

Well, we’ll know one way or the other by tomorrow afternoon, so stay tuned.  In the meantime, if you are interested more generally in the budget then tomorrow afternoon you might like to keep an eye on Olswang’s budget blog here (admission: I work for Olswang!)

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