Activision Blizzard has formally joined TIGA, the UK video games trade association. While they have only now become a member, Activision had helped TIGA in their pre-budget campaign to win tax breaks for UK developers. Back on the 11th June Activision Senior Vice President, Worldwide Studios, Brian Ward joined One Foot In The Grave actor TIGA’s Richard Wilson in a meeting with MPs sympathetic to their cause.
Activision <3 Tax Breaks
In the press release announcing Activision’s membership its Executive Vice President and Chief Public Policy Officer, George Rose, leaves us in no doubt as to his company’s prime motivation:
At Activision Blizzard we are extremely supportive of TIGA’s campaign to secure Games Tax Relief for the UK development community. The UK has one of the most talented and creative workforces anywhere in the industry. The introduction of Games Tax Relief in the UK will be a game changer. It will make the UK a significantly more attractive place to invest in games development. Games Tax Relief will lead to increased investment, more job creation and power economic growth.
Of course having built up the argument for the tax breaks that the government chose not to introduce in the recent budget he goes on to explain the dire consequences that will befall the industry should those tax breaks promised by the Liberals and Conservatives in their pre-election manifestos fail to materialise:
However, if Games Tax Relief is not introduced then the UK will remain at a real disadvantage in comparison to other territories as a location for inward investment. Without Games Tax Relief the UK games industry will not fulfill its potential.
This of course goes straight to the heart of the issue which is not that the UK does not have tax breaks for video game developers, but that other countries do. Naturally Wilson is suitably gushing about having Activision aboard the tax break train calling it “a huge boost” for TIGA and their campaign.
While last week’s emergency budget may not have included tax breaks specifically for the video games industry there was plenty of measures that businesses, especially small businesses, should welcome. Our own cc_star summed up many of those measures in his comment to our last post on the subject:
…all industries will see reduced tax burdens through lower taxation, employers contributions for National Insurance rises have been put on hold, and even cut at some levels. New start-ups can not pay NI on the first 10 employees and the biggie, Corporation Tax (essentially a tax on profits) is being reduced to the amongst the lowest levels in the developed world.
That is the positive side of the budget for businesses. There are of course negatives too which partially offset those gains like the reduction in the allowances that companies can claim against their tax bills and the impact on consumer spending or corporate margins of the increase in VAT to 20% which really just brings us more into line with the rest of Europe.
Given that it was an emergency budget it is hardly surprising that measures targeting specific private-sector industries, except the banks, were largely excluded. The government does potentially have another ten budgets and pre-budget reports in which they may yet introduce the manifesto-promised tax breaks.
It goes without saying that all companies, and individuals, would prefer to pay less tax. I know I would and I am sure if you asked the MD of the manufacturing company I work for he would too, and would likely cite the exact same reasons of investment, job creation and growth that Activision and TIGA are putting forward.
Given the current economic climate surely UK publishers and developers would find it hard to argue that a stronger and more stable UK economy does not also directly benefit them through potentially higher game sales if nothing else?