The UK government has not closed the door on tax incentives for the videogame industry, says Chancellor George Osborne.

There was disappointment for UK developers when the tax relief proposed by the old Labour government was scrapped by the new Conservative-Liberal coalition. But commenting on a letter from a member of the Scottish parliament, Osborne said that the matter was far from settled and the government would review the situation this fall.

The letter came from Dundee West MSP Joe FitzPatrick, who said that Dundee – the home of Realtime Worlds and Ruffian Games, amongst others – could lose as many as 200 jobs in the next five years if tax breaks for the videogame industry weren’t implemented. Osborne’s reply said that the UK had become relatively less competitive on tax than it had been in the past, and it would consult with businesses to see how the situation could best be handled. FitzPatrick said that he welcomed Osborne’s comments and that he would liaise with leading industry figures and trade organizations to ensure that the industry’s case was presented as strongly as possible.

A recent TIGA report suggested that the cost of tax credits to the government – estimated at £192 million – would be outweighed by the increased tax revenue the newly invigorated industry would generate. “The Treasury’s decision to drop Games Tax Relief in the June Budget was a mistake,” said TIGA CEO Richard Wilson. “The fact remains, only a dedicated sector specific tax break for games production will put the UK on a level playing field with its overseas competitors.”

Source: Edge

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