The Tax Break Agenda

While video game tax breaks may mean nothing to the casual video gamer, for those in the UK video gaming industry, it’s been a hot topic for a while now.

Just take a look at the buzz Danny Palmer (my Train2Game wingman if you will) created with his article about the issue - Okay, it gets a little off topic now and then but generally the issue is talked about and debated quite intensely. The choice quote from the thread is from BHMediaMarty: When you consider the size of the industries that they are talking about and the potential impact on future jobs I can see why there is an interest for this in the UK. Plus it's only one potential sector that they're talking about and recognising it as a beneficial growth industry in this country.

For those that see UK video game industry receiving tax breaks as a benefit, 2010 promises to be the year that those in the video game industry have been waiting for, with Labour, Conservatives and Liberal Democrats at least showing interest in introducing tax breaks into the sector.

Why politicians are more interested in the video game industry I don’t know. Maybe they see some financial potential or they view those in the industry as potential votes? I doubt it’s because they are finally showing some appreciation.

Regardless of their intentions, it’s still good that they giving tax breaks some attention. But how much are they looking into it and how high of a priority is providing the gaming industry with tax breaks?

Arguably the Conservatives have been the most vocal about giving out tax breaks. In an interview with gaming site 7outof10, the discussion of introducing tax breaks for the video game industry (not surprisingly) was the main topic.

They see sense in the video games industry receiving tax breaks, saying it would help with the recovering economy. They also claim that Labour had announced one in the Budget, but didn’t see it through and that they have been ignoring the industry for 13 years. Another criticism the Tories level at Labour is that they are quick to condemn video games.

They also believe it would be in the best interest of the industry if the Film Council’s role was expanded to include video games, citing the reason that the two industries are already converging.

The Liberal Democrats aren’t quite as big supporters as the Conservatives, since they won’t commit to give the gaming industry tax breaks, believing that “industry itself is not totally united behind it.” Though this sounds like a surprising statement, if the argument between [Vampire Duck and yaustar] is anything to go by, the Lib Dems may have an actual point.

However, they do feel sympathetic to the cause which at least shows they haven’t totally dismissed it. You can view the Lib Dems thoughts on the issue here.

Labour seem to be the least supportive of move. True, Alistair Darling has been making the round visiting the video game studios, which brings some good publicity to the industry and also could mean Labour sees potential in the video game industry. But the very same man was ready to dismiss tax breaks late last year. Could mean is that Labour could simply be responding to the way the Conservatives have been approaching gaming tax breaks?

Regardless, in their recent budget report, Labour said “creative industries, including the video games industry, make a valuable economic and cultural contribution to the UK,” with Darling announcing that Labour intends to tax help for the UK games industry.

So by the looks of things, it doesn’t matter what choice you go with, an important fact to remember is that none of the three main political parties have put tax breaks for the video game sector in their manifesto. So why there has been more awareness about the issue than ever before, those in the industry shouldn’t hold their breath.

The advantages of tax breaks for Train2Game students still studying is that they would enter an industry that will still be competitive but won’t be so tough to make run a successful studio, especially with an enhanced R&D leading to technology that could be used to create software and hardware that’s powerful but won’t make your studio bankrupt.

Which party do you think is the most supportive of tax breaks for the gaming industry? And do you see any benefit from the UK video game industry tax breaks yourself?