UK Parliament – No Tax Breaks for UK Gaming Industry
We in the UK have a difficult time ahead of us. The economy is in a bad state and we are in such huge debt that the government has to cut back on a whole ton of spending (sincerest thanks go out to Gordon Brown as Chancellor for throwing away all the country’s gold stocks at rock bottom prices just before the value skyrocketed so that now we have no savings to help us when we need it).
One of the things that this does to the Gaming Industry in the UK is the u-turn on tax breaks for UK developers and publishers. We can all sit and point the finger at Ed Vaizey or George Osbourne for promising tax breaks and then going back on it, but at the end of the day the UK industry is losing out.
The Videogames Industry contributes over a billion to the budget every year, so why don’t the government help them keep their businesses running?
Unfortunately for UK based gaming companies we live in a digital age where it makes no difference where you build the game, as worldwide releases are simple and can now be done simultaneously with digital downloads and downloadable content. Because of this development studios can work in Canada where they can get up to 30 percent of payroll in tax credits and a further 7.5 percent if they make a French language version. This makes the UK massively uncompetitive by comparison.
What is most distressing is that the high-skilled job positions and income that this industry could bring to the UK is far greater than the manual or basic skill jobs that the government seems happy to encourage. If you can get the higher tier of tax payers and the better skilled workers to stay in the UK then why wouldn’t you? I reckon that there must be other pressures here than simply what is good for the industry and for the economy. I believe that it is likely that the government does not want to be seen to support the videogame industry because of the negative publicity that so many parents and lobbyists associate with it (adolescent violence, obesity etc.).
Really, I hope the government can realise their mistake and make another u-turn in the near future because this is really hurting the gaming industry in the UK. We have already made it impossible for the big names to work here, and taxing the creativity out of our country basically makes it impossible for us to produce anything here. Greater tax leads to higher costs, lower profits and less investment into making a company bigger and more capable of making far greater returns. If the taxes were lowered on these companies they could make more profit and expand their businesses, thus making it possible for them to pay even more tax in the future. It seems the government economists haven’t been able to get the decision-makers to understand basic economics in this way.
It isn’t the end of the world at the moment, and I’m an optimist about these kinds of things. Having said that, seriously guys please write to your MPs and plead with them to lower taxes and make it possible for all businesses to grow as this is the only way we will be able to become stronger as a country.