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Rumor: Publisher Kills UK Tax Breaks for Developers; Trade Organizations Say No

by Brian Leahy, Jun 25, 2010 4:20pm PDT

Develop is reporting that "one of the biggest game companies in the world exerted pressure on the UK government and British trade associations to abandon plans for UK tax breaks."

Tax breaks for developers serve as a strong incentive to setup studios in territories as well as benefit existing studios as the breaks can greatly reduce operating costs.

GamesIndustry.biz is reporting, however, that it may have been the UK Treasury that "killed" the tax relief proposal according to Richard Wilson, the CEO of the UK games trade association TIGA. Wilson spoke with GI.biz today offering the following statement with regards to the report of publisher involvement:

The truth of the matter is we don't know. What I would say is the key thing is, rather than to look for any scapegoat in the industry at home or aboard, for Machiavellian machinations going on in the background, to focus on the Conservative party and the Liberal Democrats. They both promised before the election they would give us games tax relief. We want them to honour that commitment.

Regardless of any involvement from a publisher, Wilson is confident that the tax relief will be passed. "Even if there is, and we don't know, or has been a publisher arguing against games tax relief, they're not going to win. We've won the argument. We're going to continue with the arguments, and we are going to get it established."

GI.biz also spoke with ELSPA director general Michael Rawlinson on the issue. The ELSPA represents almost all of the video game publishers in the UK on matters such as this. Rawlinson, like Wilson, has heard nothing about any publisher interfering with tax relief.

"We have no idea where that has come from, it's totally left of field and has certainly not been on the agenda of any of the many political briefings we've been involved in," Rawlinson said. "That's not to say it's not true, but we've been discussing tax relief for some time, and lobbying solidly. It's something we haven't come across."

Although ELSPA does not think the allegation is true, it will make make enqueries to seek more information, though "it's highly unlikely anyone will admit to lobbying against tax relief for the industry."

It is unclear what Develop is claiming, especially with no source cited and no publisher named, though that publisher is supposedly "celebrating the success of its own lobbying. This company had apparently viewed game tax relief as a measure that would have given the UK an unfair advantage over other nations."

We'll update you with any new information on this story, but it appears that, at this point, not much is known about Develop's accusation.