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Tax Credit Sends UK Game Industry On Hiring Spree?

polycounter
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Mathew O polycounter
I'm trying not to get my hopes up, what do the more knowledgeable amongst you think? Sounds realistic?

http://www.jacehallshow.com/blog/tax-credit-sends-uk-game-industry-on-hiring-spree/

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  • SHEPEIRO
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    SHEPEIRO polycounter lvl 17
    it should help but were still not going to be on a level playing field with Canada
  • Vio
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    Vio polycounter lvl 6
    Its all good but tax changes tend to take a year to kick in with true results on the ground. Its probably why general growth figures have been revised up for the coming years but unchanged for this year.

    By the end of the parliament there really isn't many reasons why we shouldn't be as competitive as the other hot zones because our corporation tax will be down to 22% by then, probably just sounds like a load of numbers right now but it will change things.
  • rooster
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    rooster mod
    any idea if this will help indies like me? I don't understand enough to know really. I'm only a sole trader too
  • Vio
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    Vio polycounter lvl 6
    rooster wrote: »
    any idea if this will help indies like me? I don't understand enough to know really. I'm only a sole trader too

    If you pay corporation tax you should find its just been reduced by 1% and will go down to 22% by 2014. The tax credits should be on what's sold as far as I understand. Its basically a tax break that has only been in the film industry but now includes the games an animation industry.
  • ae.
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    ae. polycounter lvl 12
    I just wish Vancouver would get some Tax incentives from the government, kinda sucks looking at how Montreal and Toronto are getting most of it :(

    (disclaimer: i have no clue why and how these tax incentives are handed out)
  • Dylan Brady
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    Dylan Brady polycounter lvl 9
    i feel dumb for asking, but does america have anything like this yet?
  • Kwramm
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    Kwramm interpolator
    Good luck?

    I hope future managers are clever enough to base their businesses not just incentives alone. While its good in the short run, the long term consequences scare me. An entire industry dependent on special tax breaks? Better use that chance to build something sustainable. Those breaks won't be there forever.
  • Del
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    Del polycounter lvl 9
    Kwramm wrote: »
    An entire industry dependent on special tax breaks? Better use that chance to build something sustainable. Those breaks won't be there forever.

    Which is exactly why Vancouver and the rest of British Columbia's game industry disappeared virtually overnight.
  • Vio
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    Vio polycounter lvl 6
    Kwramm wrote: »
    Good luck?

    I hope future managers are clever enough to base their businesses not just incentives alone. While its good in the short run, the long term consequences scare me. An entire industry dependent on special tax breaks? Better use that chance to build something sustainable. Those breaks won't be there forever.

    I don't think business needs to worry about that because these 2 taxes just happen to be going to the threshold which it should always be. its been proven time and time again that lower taxes improve business. Its the only reason Hong Kong became richer than the UK in 1999.
  • rolfness
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    rolfness polycounter lvl 18
    Theres alot of info here

    http://www.tiga.org/news/tigas-successes-in-the-budget-2012

    TIGA has a number of successes in Budget 2012, such as:

    2.47 Enterprise Management Incentive (EMI) scheme – The Government will more than double the individual grant limit from £120,000 to £250,000, to commence at the earliest opportunity following State aid approval and provide enhanced guidance to support start-ups. Entrepreneurs’ Relief will be extended to gains on shares acquired through EMI, and the Government will consult on extending the scheme to academics employed by a qualifying company, from April 2013 subject to State aid approval. (Finance Bill 2013) (14)

    This basically means that investors/employees that are given shares as an alternate method of reimbursement in companies under the EMI scheme will get a tax break More here http://www.hmrc.gov.uk/shareschemes/emi-new-guidance.htm

    2.96 Corporation tax: main rate – The Government will reduce the main rate of corporation tax to 24 per cent from April 2012, rather than 25 per cent as had been announced at Budget 2011. The rate will then be reduced by a further 1 per cent in each of the following two years, and as a result will be 22 per cent from April 2014. (Finance Bill 2012 and Finance Bill 2013) (7) (m) (aq)

    Dont know why they listed this on the Tiga website as it applies to all companies.. not really something games industry specific but something that needs to happen for the UK economy as a whole as its in the fricking dog house.. latest growth forcast revised to -0.3 in todays news ... =.=

    2.98 Patent Box – As announced in the Corporate Tax Road Map in November 2010, the Government will introduce a reduced 10 per cent rate of corporation tax for profits attributed to patents and certain other similar types of intellectual property. The regime will be phased in over five years from 1 April 2013. (Finance Bill 2012) (bg)

    http://www.hmrc.gov.uk/budget2012/tiin-0726.htm

    2.99 Research and Development (R&D) tax credits – As announced in Budget 2011, with effect from 1 April 2012 the rate of R&D tax credits for small and medium enterprises (SMEs) will increase from 200 per cent to 225 per cent; the limit of SME payable credit, based on their PAYE/NICs liability, will be removed; and the £10,000 minimum expenditure requirement for large companies and SMEs will be abolished. The Vaccine Research Relief for SMEs will also be removed. (Finance Bill 2012)

    2.100 R&D tax credit: ‘Above the Line’ (ATL) – From April 2013, the Government will introduce an ATL credit for R&D, with a minimum rate of 9.1 per cent before tax. Loss-making companies will be able to claim a payable credit. The Government will consult on the detailed design of the credit shortly after Budget. Final rates, including for the payable credit, will be decided following consultation. (Finance Bill 2013) (12)
    A company would basically pay less corporation tax, calculated by amount spent on R&D more here http://www.bis.gov.uk/policies/innovation/business-support/rd-tax-credits/about

    2.101 Corporation tax reliefs for the creative sector – Following consultation on the design, the Government will introduce corporation tax reliefs for the video games, animation and high-end television industries from April 2013, subject to State aid approval. (Finance Bill 2013) (13)
    be interesting to see what the details are for this

    Rooster I dont think so, as a sole trader most of these rules wont apply to you because they apply to a Limited company. Potentially you should consider incorporating a Ltd..it would all depend on how much you're making as a sole trader at the moment.
  • Ace-Angel
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    Ace-Angel polycounter lvl 12
    There is what, a handful of studio's at most in the UK...I really hope this changes things.
  • FAT_CAP
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    FAT_CAP polycounter lvl 18
    Ace-Angel wrote: »
    There is what, a handful of studio's at most in the UK...I really hope this changes things.
    There's only a handful of studios in the UK? Just how big are your hands?
  • Ace-Angel
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    Ace-Angel polycounter lvl 12
    Pretty big, my second nickname is White Yeti ;P

    ( Although I wish said nickname would also materialize in my pants too :( )

    What I mean is most of are of considerably smaller caliber in size and budget when it comes to other peeps and those that belong to 'bigger' studios end up doing kludge work as opposed to being the main peeps on a main project.

    Here is a list from Wiki: http://en.wikipedia.org/wiki/Category:Video_game_companies_of_the_United_Kingdom

    I can officially say, I played maybe games from 10-20 tops studio from that list, not counting stuff like branches from Sega, and most didn't even put out a game for the past 2 years at least.

    I hope, with this new incentive, these studio's not only hire more people, but are put less in a position of 'fodder' and second hand multiplayer, and those that indie, put out more games.

    But hey, atleast it's not as uncharted as Australia.
  • cw
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    cw polycounter lvl 17
    Why are we not on that list? bah humbug!

    By the way - new release last week http://www.totalwar.com/shogun2/fall-of-the-samurai
  • Ikosan
    the UK has been knocking out some pretty good games recently, Batman AA, Little Big Planet, Wipeout, Fable, Total War etc. Yeah not as much as the US and Canada but then its a fraction of the size. These tax breaks arn't really coming in to give the UK an advantage but to level the playing field with Canada and the US who already have similar schemes. The UK has lost a lot of talent due to the fact it couldn't compete, hopefully this'll change with these new breaks but i'm not holding my breath
  • Vio
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    Vio polycounter lvl 6
    cw wrote: »
    Why are we not on that list? bah humbug!

    By the way - new release last week http://www.totalwar.com/shogun2/fall-of-the-samurai

    Total War looks awesome I'l be having that soon. Do you know if your on GameDevMap.com? I have seen way more studios on there than that wiki list although its poorly maintained. Many of the links on GameDevMap seem to be broken or linked to studios that went out of business years ago.
  • Di$array
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    Di$array polycounter lvl 5
    Fingers crossed, more job will be created because I really need a job this year. But I think it will take a couple years for the tax break to really make a difference to the state of the UK industry.
  • dempolys
    Vio wrote: »
    Total War looks awesome I'l be having that soon. Do you know if your on GameDevMap.com? I have seen way more studios on there than that wiki list although its poorly maintained. Many of the links on GameDevMap seem to be broken or linked to studios that went out of business years ago.

    GameDevMap is suuuuper outdated.

    Plus; that wikipedia link was missing a ton of studios and has listed a ton that don't exist anymore.
    It doesnt even have SplashDamage on there, yet it has BizarreCreations which shutdown a while ago
  • Mathew O
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    Mathew O polycounter
    Di$array wrote: »
    Fingers crossed, more job will be created because I really need a job this year. But I think it will take a couple years for the tax break to really make a difference to the state of the UK industry.

    Same here man, I can't help but think that I'm going to have to leave the country to stand any real chance.

    Like others have said, I think it'll take a few years to really impact the amount of jobs available and even then I can't apply to almost every job due to lack of a shipped title.

    Disclaimer: This isn't supposed to come off as a pity post. :P
  • Justin Meisse
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    Justin Meisse polycounter lvl 19
    i feel dumb for asking, but does america have anything like this yet?

    Yeah, sort of - mostly corporate tax loopholes, state film & game tax credits, clever bookkeeping. If Washington announced a tax break for the game industry there would probably be a national uproar about it.
  • Torch
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    Torch polycounter
    Di$array wrote: »
    Fingers crossed, more job will be created because I really need a job this year. But I think it will take a couple years for the tax break to really make a difference to the state of the UK industry.

    You and me both man, I'm sure there's a lot of people in the same situation. Lets keep our fingers crossed! :thumbup:
  • Vio
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    Vio polycounter lvl 6
    dempolys wrote: »
    GameDevMap is suuuuper outdated.

    Plus; that wikipedia link was missing a ton of studios and has listed a ton that don't exist anymore.
    It doesnt even have SplashDamage on there, yet it has BizarreCreations which shutdown a while ago



    It would be be great if what happens on both those sites happened here on Polycount in a new section or something. Probably much more likely to be updated then. There's already a cool thread detailing who of us are in work.
  • JacqueChoi
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    JacqueChoi polycounter
    Kwramm wrote: »
    Good luck?

    I hope future managers are clever enough to base their businesses not just incentives alone. While its good in the short run, the long term consequences scare me. An entire industry dependent on special tax breaks? Better use that chance to build something sustainable. Those breaks won't be there forever.

    This is a HUGE fear of mine. But the film industry has had them forever.

    Del wrote: »
    Which is exactly why Vancouver and the rest of British Columbia's game industry disappeared virtually overnight.

    Vancouver decided to go with the route of fully funding film and animation over video games.

    It's why the game studios left, but Sony Imageworks, Dreamworks, Pixar, Digital Domain, and plenty of others recently opened up shop there.
  • FAT_CAP
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    FAT_CAP polycounter lvl 18
    Ace-Angel wrote: »
    What I mean is most of are of considerably smaller caliber in size and budget when it comes to other peeps and those that belong to 'bigger' studios end up doing kludge work as opposed to being the main peeps on a main project.

    Here is a list from Wiki: http://en.wikipedia.org/wiki/Category:Video_game_companies_of_the_United_Kingdom

    I can officially say, I played maybe games from 10-20 tops studio from that list, not counting stuff like branches from Sega, and most didn't even put out a game for the past 2 years at least.

    I hope, with this new incentive, these studio's not only hire more people, but are put less in a position of 'fodder' and second hand multiplayer, and those that indie, put out more games.

    But hey, atleast it's not as uncharted as Australia.

    This has traditionally been the case with the UK games sector though - with most of the studios (and most of the employees) working on and putting out "middle-tier" titles. Games which are not big enough to be considered truly AAA and not small enough for indie.

    This is the kind of game that was cheap enough to produce without major budgets, and sold well enough on the 16-bit systems and into the PS2/ XBOX years, but fell by the wayside in the current-gen times...thus making a lot of studios go under and a lot of people losing their jobs.
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