The Government’s decision to introduce Games Tax Relief in last week’s Budget is good news for Brighton & Hove which is fast becoming the gaming hub of the south east with the potential to be a player on the world stage.
The UK video games industry contributes about £1 billion to the UK GDP and employs about 27,000 people, in often highly skilled graduate positions. In Brighton & Hove we have a slew of companies that have formed a burgeoning cluster in the city including Relentless, Zoe Mode and Disney's Black Rock Studios.
With 73% of the UK population claiming to play video games regularly they also form an integral part of modern culture and, increasingly, in education and training.
But Brighton and the rest of Britain has competition from other places that also see themselves as a centre for gaming e.g. Australia, Canada, France, South Korea, and America and they all receive national or regional tax concessions for games production.
Montreal, for example, offers 5 year income tax holidays for foreign specialists and pays 37.5 per cent of the salary costs of the development staff employed by games companies while R&D tax credits cover 20-35% of qualifying expenditure. Such tax advantages make it hard for the UK to compete.
TIGA, the trade body for gaming, estimates that between July 2008 and March 2010 the number of employees at British video games studios fell by 7 per cent, and 15 per cent of British video games firms went out of business. In addition the UK fell from third to fifth place in global sales charts between 2006 and 2009, overtaken by Canada and South Korea.
The 2010 budget has now introduced Games Tax Relief, which will operate in a similar manner to the UK Film Tax Relief, thus enhancing the competitiveness of the UK video games industry at a stroke.
Research by TIGA indicates that Games Tax Relief could create [or safeguard] 3,550 graduate level jobs and £457 million in new development expenditure over 5 years.
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Black Rock Studios