Reserach and development tax credits for the creative industries should be extended to help Dundee’s video games sector.
Games trade organisation TIGA is today publishing a report examining how the tax credit system can be improved to aid the industry — seen as a key driver of the economic recovery.
The coalition government scrapped plans to introduce tax breaks for games companies, although they are eligible to benefit from some tax credits open to firms that carry out research and development.
However, TIGA believes the system must be refined to ensure the games industry in Scotland and the UK as a whole continues to thrive. It believes the scheme should be extended to include other costs associated with the development of a game, including rent, design costs and intellectual property protection.
TIGA also claims the rate of relief under the small to medium-sized enterprise (SME) research and development tax credit scheme should be increased from 175% of qualifying expenditure to at least 200%. This would mean that for every pound an SME spends of qualifying expenditure it would get two pounds of tax deduction that it would use to reduce its corporation tax.
TIGA is also calling for the rate of assistance given to loss-making companies to increase to aid those companies that spend longer on research and development.
TIGA chairman Jason Kingsley said, “If the coalition government wants to support highly skilled, high-tech industries then it should look seriously at the proposals TIGA has set out and introduce these changes in the Budget on March 23.”