News TIGA hits out at UK tax relief plans

http://www.bit-tech.net/news/bits/2010/11/19/tiga-hits-out-at-tax-relief-mess/1

 

I don't think either need tax relief but if the film industry gets it I see no reason why the games industry shouldn't.

 

There should be automatic tax relief for any company that demonstrates that a) it doesn't actively work against the public good (so that rules out the banks, supermarkets, and pretty much all corporate enterprises really), b) it generates good jobs, by which I mean creatively fulfilling, reasonably paid (where the board room pay is connected to the 'shop floor'), and reasonable hours (so the games industry as it is would probably fail, but could adapt.)

Obviously legislating this would be difficult, so the final arbiter in determining company compliance will be me. For which I'll qualify for tax relief of course.

Problem solved.

 

Canada is rocking with great incentives for talent and a booming development industry.

Then there is the UK ...

 

Interesting disconnect the current regime seems to have. Provide tax breaks for the film industry and big players like Time Warner open up shop and employ 600 people, generating all kinds of ancillary spending that's good for the economy. Yet the G-men can't connect providing similar tax breaks for a similar industry with a similar increase in jobs in the country. Aren't we supposed to be doing everything we can to stimulate the economy right now?

The inequality between game and film in the eyes of the government doesn't surprise me in the least. As much as they like to say "we're all in this together", many of the Conservative MPs who came to office from industry are happy to channel their business earnings through tax havens while hiking our taxes and dropping our credits. Slogan should be more like "You're all this together, we're lovin' it"

@battles_atlas: Nice idea. Except it's wide open to abuse. And would cost a fortune to run. And it would threaten the jobs of a whole load of lobbyists who would dedicate themselves to blowing it out of the water.

 

I'm sure recent figures showed the gaming industry as more valuable to the UK economy than the film industry. It doesn't make sense to penalise the people doing more to get us out of the mess politicians made.

 

Fixed for you, Joe

Will, I saw something about that too - perhaps it was on this site when the games industry was lobbying before the election?

The difference between the games industry and the film industry is that it's obvious when a film is made in the UK. it's not so obvious when a game is produced here. In addition to this, there are also other more tangible benefits arising from successful British films, such as increased tourism, which wouldn't necessarily be attributable to games companies (I've never heard of people visiting Edinburgh just to go and see Rockstar or going to Guildford to see Criterion).

From the point of view of an MP, giving a tax break to the film industry looks good, because most people know that the UK makes good films; giving a tax break to the games industry wouldn't look as good, because very few people know that the UK even has a successful games industry - and if you're an MP, it's all about how the public perceive you.

 

...It's also because they are clueless and outdated.

 

I can remember when UK used to lead the world in game development.

 

This is predominantly down to tax income earned on games produced and often distributed by foreign companies, which is irrelevant in this case.

Not receiving tax breaks /= getting penalised.

The ridiculous sense of entitlement displayed by the British when something they enjoy doesn't get love is profoundly irritating.

If this idea was worth implementing it wouldn't have been scrapped at a point where much of the work has been done. Evidently the decision made was that the income from any new enterprise this would encourage is unlikely to outweigh the income lost by allowing existing firms to drop out of the tax system.

Given the circumstances it seems both a reasonable and sensible decision.

 

I work in, or at least on the periphery of, the film industry - only I don't, because we don't really have a film industry. For years, film funding has gone to the most appalling upper-middle-class Sloaney types to make unwatchable kitchen-sink bilge and as a result we don't really make anything anyone wants to watch anymore. One of the best decisions this government has made is the disbanding of the UK Film Council, which was the root of this old-boy's-act grapevine and dedicated itself with amazing despatch to ensuring this state of affairs continued - they really were, in fact for a while still are, the most galactically useless organisation.

Yes we make Harry Potter and James Bond but that's all American financed and the money goes straight back out of the country - which is a real head-desk considering they're both British-initiated franchises.

So you can't really fund the film industry because we don't have one. If you want to contend that what we do have is a "film industry" then there is very little point giving it tax breaks because it makes almost no money - in fact it probably makes less money than the arts funding given to it. There is no point subsidising a film industry that exists only in rhetorical political speeches.

The games industry on the other hand is well worth supporting.

 

There's some blokes here from Codemasters, Rockstar, Rare... they'd like a quiet word in your shell-like.

Being told the industry would receive tax breaks, just like a less profitable industry in this country, then having them taken away at the last second = getting penalised.

Oh yeah, because nobody's ever seen some other developed country where its voters can get p***ed off. Whoever heard of people mouthing off against the government in America because something they love didn't get its own way? /sarcasm

The UK is set to lose all its developers to other nations (Codemasters have said they're happy to up sticks to Canada), and we're going to stand idly by while the best of our talent goes off to pastures anew. Why shouldn't I be annoyed?

 

saw the new harrys potter and he gets his awkward groove on when the locket opens.. it was hard to watch

tax relief wouldn't be a bad idea if business is leaving the country.. see here it's more a state tax thing.. each state is different in how it taxes- then we swallow whatever washington does in federal

so when we have a fallout like that.. where business is leaving the state, people usually roid rage and impeach or elect a new governor to bring things back to reality.. imo politicians do not live in reality- more along the line of professional liars a lot of them.. there are some good people out there but they'll get pushed out of the race with no sponsorship from the puppetmasters

we finally had meg whitman (old ceo of ebay) who spent 160 million of her own money to campaign for governor and lost to a career politician here.. so hard to win and change things when the toolbags vote for anybody who 'hates rich people' and shafts everybody

 

Surely the logical answer is that we should have lower taxes all round: for all industries, and for employees. So many studies have shown that lower taxes result in economic growth, meaning that even governments addicted to spending other people's money end up all right. And personally, I'd appreciate being allowed to take responsibility for spending my own money instead of being forced to hand it over to the state, which for some reason thinks it can spend it better than I can.

 

Well, Aggregate Demand is linked to consumption (people going out any buying stuff), but is also linked to government expenditure (the government going out and buying stuff). Therefore, if you lower taxes to increase consumption you'll decrease government expenditure, meaning that Aggregate Demand and therefore Economic Growth will not change by much.

In fact, AD would go down as people would be more likely to save the extra money which they had got from lower taxes rather than spending it, meaning that AD would go down and so would Economic Growth.

(Finally, a "use" of the stuff which I learnt in Economics!)

 

It really depends. If you tax high income people more, and the government spends it, you get a net boost in demand as it is likely many high income people would not have spent all their money - instead saved. If you tax low income people, who are likely to spend 100% of what they get in, then you are getting a net loss, because despite you are still spending the same amount of money, the government deciding what to spend it on is far less efficient than people deciding what they need.

Fundamentally, it's a complex question with no single answer for no single economy, because there are so many different factors involved. As for the games thing, I would say I disagree with the government based on the long term potential to lose good developers. We are in a new global economy of goods and services - and games is one of the things we can kinda do well. Not as good as America perhaps, but give it a little bit of a nudge, and British Games may become a standard of quality up there with British Aeronautical Research or something else we do well, lol.

Imagine one day where 1 in 2 people in the UK knew about programming, or games development, or something along the lines of creative media. Imagine what a hotbed the UK would be for international investment in the creative industries. And I am certain that the global trend will be an increase in how much creative works people want as economies like China, India and Brazil really start to turn into middle class credit-card-wielding consumers (a bit like us ).

Problem is, governments are only in power for 4 years. Why pay money out that wont get anything back in votes / economic confidence / economic growth at the next election?