Videogame trade association TIGA has submitted a report to the Department of Culture, Media and Sport outlining the benefits of introducing cultural tax breaks for UK games production.

The move follows the June publication of the Digital Britain report, in which the Government committed to work with the games industry to collect and review the possibility of introducing tax relief for the development sector.

TIGA’s report, Investing In The Future, proposes game development tax breaks adapting existing legislation for the UK's film tax relief, which it says “resurrected" the British movie industry. It notes that employment in the UK game development sector fell by four per cent between July 2008 and July 2009, and that during the same period 15 per cent (44) of UK development studios went out of business. The introduction of tax breaks, it argues, would create 1,400 new jobs and trigger hundreds of millions of pounds in new investment by British studios.

In order to be eligible for relief, “games would need to pass a cultural test, scoring against criteria of European heritage and game locations, languages, innovation, narrative, and location of development and key development staff. 44 per cent of UK made games profiled in an exercise for the report passed,” says TIGA, which submitted its findings to Sion Simon, MP and Minster for Creative Industries.

“The Games Tax Relief is estimated to cost £54m in year one (covering current and new projects), falling to between £32m-£36m thereafter. With 60-80 titles benefiting per year, the tax measure would assist UK game developers without distorting the larger European game development market.

“The Games Tax Relief is expected over five years to create 1,400 new jobs in the studio sector, increasing investment by games studios by £146m, direct and indirect annual tax revenues by £133m and GDP contribution by £323m. By year five, for every £100 of investment by government in the Games Tax Relief, the industry will invest £176.”

TIGA CEO Richard Wilson said: “The evidence presented today provides a robust argument for the introduction of a cultural tax break for games production, which will benefit both the UK games industry and also ultimately the wider economy, providing additional jobs, investment and UK tax revenues. We hope the Government will work to introduce TIGA’s proposed Games Tax Relief at the earliest opportunity.”

Lord Puttnam, vice-chairman of the All Party Parliamentary Group on the Computer and Video Games Industry, wrote in a foreword to TIGA’s report: “For far too long the UK video games industry has been effectively ‘taken for granted’.  To ensure the continuing success of this pre-eminently creative sector, I can only urge the Government to support TIGA’s case for the introduction of a form of Games Tax Relief, as set out in this report.”