The Effects of Tax Credits on the Games Industry
– Dr Tom Phillips
The paper draws on literature derived from policy makers, trade bodies, industry practitioners, and popular and trade press. Sources include:
- Policy documents from HM Treasury, Department for Culture, Media and Sport, the British Film Institute, the Office of Fair Trade, and the European Commission.
- UKIE and TIGA’s responses to consultations and outputs to members.
- Interviews with or articles by videogame developers from public forums such as GamesIndustry.biz.
- News articles in trade publications such as Develop or Edge, or popular news sources such as The Guardian or the BBC.
Adhering to a tentatively chronological outline, the paper begins with a discussion of the seven-year drive to implement videogame tax credits in the UK. The paper presents the way in which debate was framed by various stakeholders, and the proposed benefits of tax relief for the games industry.
Following this, the paper documents response to the March 2014 announcement that games tax relief is to be implemented in the market. This considers how respective stakeholders are preparing for changes in business practice, and the extent to which the initiative is being adopted at differing levels of the games industry. Although the findings of the paper may reveal new patterns of categorisation, the review sought to classify impact on the following areas of the games industry:
- The tensions between creativity and business development
- The value of games to British culture
- The economic impact of new and increased investment in the sector
Finally, the paper proposes action needed to be taken by the games industry in order to fully capitalise on the initiative. The recommendations were informed by the preceding literature review and a consideration of the successful implementation of tax relief in the British television, animation, and film industries.
In addition to becoming a CREATe working paper, the research is intended to be shared with industry partners in order to maximise impact. Such partnerships already exist with UKIE, TIGA, Scottish Games Network and Norfolk Independent Game Developers. These groups were consulted during the research process in order to inform the paper’s outputs and to further develop these partnerships for future research opportunities.