No more tax breaks for games industry

George Osborn’s decision to scrap the tax relief for the games industry has drawn the wrath of the Video Game makers Activision Blizzard. Activision implied that they may consider closing their UK office and move to a place where a better taxation culture presides.

The former Chancellor, Alistair Darling had proposed tax reliefs for video games industry while in office. And despite the Conservatives and Lib Dems pre-election promises to keep the relief, the Coalition government is now set to scrap the proposals. In his emergency budget, Chancellor George Osborne dismissed the proposals, labelling them “poorly targeted”.

Bobby Kotick, Activision’s CEO, has labelled the decision a “Terrible mistake”. He also stressed the ubiquity of places where video games industry receives better support.

According to Kotick, the tax reliefs were essential for the UK labour market to remain competitive with that of the Far East and some US states that offer tax reliefs. Activision UK office employs around 600 employees and video games developers.

Only last week Activision’s Call of Duty Black Ops has been announced 2010’s best-selling game. The popular game sales sold over $1bn despite being only released in November.

TIGA, the UK’s gaming industry body, has criticised the decision. They stated that although budget deficit reduction is necessary, the decision aggravates the risk of losing a plethora of talented videogames developers as videogames makers shift their workforce focus outside the UK.

The reintroduction of the proposed reliefs could secure more than 3500 jobs for graduates and encourage students to follow their aspiration of studying science and maths, according to Richard Wilson, TIGAS CEO. He stressed that videogame sector is a large window of opportunity for growth and job creation in the UK.

Wilson criticised the Coalition government for their all-cuts-no-growth policy. He described the Government’s approach to deficit reduction as that of a “one-club golfer”.