News

UK Government Uneasy About Tax Breaks

Culture minister Margaret Hodge says the UK government is nervous about offering tax credits to the games industry, and must see evidence that the sector is headed for a "genuine market failure" before it can be convinced to do so.

Culture minister Margaret Hodge says the UK government is nervous about offering tax credits to the games industry, and must see evidence that the sector is headed for a “genuine market failure” before it can be convinced to do so.

Speaking on Tuesday at the UK Games Industry Westminster Media Forum, as reported by Develop, Hodge said that the government is looking at the possibility of introducing tax credits for UK games developers, but that key figures within the treasury remain unconvinced that such breaks are required to reinvigorate the domestic industry.

"I know this is hugely important to many of you. And you rightly make the comparison between the relief we give to film,” she said, also acknowledging the existing game development tax credits offered in Canada and France.

But, she added, “We’re nervous about these forms of tax relief. Because it costs us money. And you don’t want to get into an international Dutch auction.

“We’re nervous because we need to think if it provides a sustainable way to provide continuity and growth for the industry.”

It is up to the UK games industry to convince the government that tax breaks for game developers are the only way forward, Hodge said.