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L. Spiro

UK Tax Relief for Video Games

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L. Spiro    25620
http://www.develop-online.net/news/42752/Revealed-The-video-games-cultural-test

Is anyone else as bothered by this as myself?

I will start by saying I have no problem with the UK in general nor its people. Snatch was a great movie and even more watchable due to the cute accents. I myself once even dreamed of living in England in order to work at Rareware. But now that would be impossible. I would never have a chance at rising to the top because of this new legislation which heavily promotes workplace bias.

Does anyone disagree with that?

Furthermore, am I the only one who thinks the rest is nothing but payola? “Up to 4 points may be awarded in respect of the contribution of the video game to the promotion […] of British culture.”
How is this not payola?

How would you feel if you had designed this masterpiece of a game only to have the government stick its nose into your business and put you into a position in which you have to decide between sacrificing the heart and soul you put into your product or having to pay more taxes? Of course developer can always just pay the full tax as usual, but for the government to test their scruples and tease them with tax cuts is just an asshole move.




How about your view as a consumer?
This definitely promotes sell-out behavior, and you may soon find games with out-of-place British elements added just for the tax cuts even though they detract from the experience.
Do you as a consumer appreciate this? Will you buy games from developers who seem to have sold out for the tax cuts?
I have no problem buying and playing British games—Conker’s Bad Fur Day and Perfect Dark are 2 of my favorite games of all time—but not if they were made that way just for the sake of a tax relief.


This legislation sheds a very dim light on the British government. How do you feel about it?


L. Spiro

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_the_phantom_    11250
[quote name='L. Spiro' timestamp='1355266662' post='5009576']
This legislation sheds a very dim light on the British government. How do you feel about it?
[/quote]

In fact it doesn't; the rules with regards to 'state aid' are apparently an EU wide thing so it is either this setup or not tax relief at all.

While this has caused a bit of facepalm-ing and an amusing twitter hash tag the truth is seems to be pretty easy to get the 16 out of 32 points required to qualify without compromising a game.

For example you can get 3 points by setting your game either in the EEA or some undefined location for 75% of the time. 4 points if the story is British or covers another EEA state (so anything taking part in or effecting the EU). Dialogue is likely to score you 4 points in most games. Do 50% of the work in the UK; another 2 points. 1 point for doing music, voice or audio recording/production in the UK.

That's 14 right there which are unlikely to affect a games development; throw in some points from the people developing the game and your 16 points is in the bag.

None of those are going to harm the game but will promote work being done in the UK (economy++) rather than outside of it.

And something like this is required to try and improve the industry here and prevent the "brain drain" to Canada which has plague the industry here of late too.

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swiftcoder    18426
[quote name='L. Spiro' timestamp='1355266662' post='5009576']
you may soon find games with out-of-place British elements added just for the tax cuts even though they detract from the experience[/quote]
International (particularly American) audiences seem to react quite well to 'British elements' in all sorts of media.

Did you ever notice how the first 5 Call of Duty games were about the Yanks fucking up, and the right honourable British troops pulling their arses out of the fire?

***

But joking aside, do you really expect to get something for nothing? Game developers want tax cuts (a.k.a. free money), have storytelling capability. Government wants good PR (a.k.a. storytelling), has lots of money. Match made in heaven.

And if your artistic integrity is so very precious to you, well, I've got news for you: the British government isn't the only entity out to get you. There's this little thing called a 'publisher'...

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L. Spiro    25620
[quote name='phantom' timestamp='1355268761' post='5009585']
None of those are going to harm the game but will promote work being done in the UK (economy++) rather than outside of it.

And something like this is required to try and improve the industry here and prevent the "brain drain" to Canada which has plague the industry here of late too.
[/quote]
You could achieve the same thing by just requiring that it be developed in the UK. Why the extra clauses about the content of the game and the nationalities of the developers?

If I worked at Rareware I would be paying taxes to and contributing toward the growth of the British government. Why do they then need to add points for people in management being from the UK (people assume that is what is meant by “qualifying person”)?


Basically, if the problem is outsourcing, then don’t give the tax cuts to any work that is outsourced.
Whatever the problem are there are ways to avoid them without having to add all the regulations on game content or development personnel. The fact that these exist at all is a clear sign that the government has an agenda not strictly related to the promotion of the industry.


[quote name='swiftcoder' timestamp='1355269745' post='5009590']
But joking aside, do you really expect to get something for nothing?
[/quote]
#1: Malaysia gave (maybe still gives) full tax exemption to video-game companies. Why does the British government need to use bribery?
#2: What it gets in return is a healthy video-game industry, more jobs, more overall revenue. Why is that not enough? They need to feed their egos too (talking about the government here, to avoid any confusion/offense)?


[quote name='swiftcoder' timestamp='1355269745' post='5009590']
And if your artistic integrity is so very precious to you, well, I've got news for you: the British government isn't the only entity out to get you. There's this little thing called a 'publisher'...
[/quote]
I was talking from the point of view of the publisher or possibly as an indie.


L. Spiro Edited by L. Spiro

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_the_phantom_    11250
[quote name='L. Spiro' timestamp='1355269777' post='5009592']
The fact that these exist at all is a clear sign that the government has an agenda not strictly related to the promotion of the industry.
[/quote]

I'm sorry, did you miss the part where I pointed out that this set of requirements was an EU thing and not a UK government thing?

The choice is tax breaks with these rules or no tax breaks - the UK government finally wants to help the industry here so they have to do it within the rules.

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L. Spiro    25620
[quote name='phantom' timestamp='1355270283' post='5009596']
I'm sorry, did you miss the part where I pointed out that this set of requirements was an EU thing and not a UK government thing?
[/quote]
Yes


[quote name='phantom' timestamp='1355270283' post='5009596']
The choice is tax breaks with these rules or no tax breaks - the UK government finally wants to help the industry here so they have to do it within the rules.
[/quote]
When Malaysia wanted to help, it gave unconditional tax breaks.


L. Spiro

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L. Spiro    25620
Did you mean that those rules are imposed upon the UK by the EU? My first read of your previous reply left me thinking you meant, “If the developers want the tax cuts they have to play within the rules imposed by the government.”

If the UK is forced to do it this way because of the EU, frankly I don’t get it but that certainly shifts the blame and the dim light.
Why does the EU make it this way?


L. Spiro Edited by L. Spiro

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ChaosEngine    5185
[quote name='L. Spiro' timestamp='1355272127' post='5009607']
Why does the EU make it this way?
[/quote]

Because the EU loves bureaucracy?

A possible explanation (off the top of my head) would be to blame France [img]http://public.gamedev.net//public/style_emoticons/default/tongue.png[/img]. They are notoriously wary of the Americanisation of their culture and this might be seen as a way to promote telling local stories.

Or that could be utterly untrue... who knows?

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Remember many people complain about tax breaks for games in general because games are a luxury item (not something needed for survival), and even moreso because it was used by foreign large companies which could hamper small local companies and local start-ups, so most likely they needed some sort of justification to give away tax breaks.

Personally I prefer tax breaks based on size (companies without many resources get them, but companies with quite a good amount of resources can't get them), but that's a different topic.

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black_darkness    280
I wonder if someone made a game retelling the Braveheart story would they still get tax credit. The whole story uplifts the Scottish part of the UK and slanders the Brittish side.

I would still buy a game if it was focused in UK. But I wouldn't like it to be forced. For example if Rome Total war 2 takes place in the UK (Which it does but only 2 territories out of over 100 in the original.) just so they could take advantage of the break. I am now curious about how much video game companies are influenced by the governments of their respective countries. Mainly Korea because there is something about Korean MMO's that I find suspicious they are just too addictive.

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Oberon_Command    6076
[quote name='black_darkness' timestamp='1355280324' post='5009662']Mainly Korea because there is something about Korean MMO's that I find suspicious they are just too addictive.[/quote]

I would think that Korean MMOs [i]have[/i] to be addictive in order to pull potential players away from StarCraft... :P

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Hodgman    51223
Lots of government funding works this way -- money is coming out of the government's "arts" and "culture" budget to go into some industry that produces "arts/culture". They want to get a ROI as usual, and they only way they can think to do so is to push their ideas of what culture should be.

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BlueSalamander    966
I agree with the original comment. I see the policy as par for the course for the UK government. Politicians in general do not do anything unless they perceive a benefit for themselves. Maybe they think of the prestige, maybe they want to appease nationalists, or maybe they just like the idea of having more control over game production.


Concerning EU state aid rules, as far as I know national governments have full powers to set their own taxes. A tax cut is not a subsidy. It's not free money, just a reduction in the amount of money stolen from each company. I don't think a sector-wide tax cut would be a problem with the EU.

But if it can't be done without the EU complaining, the UK can still introduce an economy-wide tax cut, or say bye-bye to the EU. The EU rightly gets blamed for a lot of things but national governments are the main culprits for their own poor policies.


The new plan may even be going against the EU spirit of not discriminating against companies on the basis of what EU state they come from. Some of the criteria of the test (points 4 and 5 for example) concern the UK exclusively.

Anyway, all of this probably doesn't matter as the cut is likely to be something like 0.1%...

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Dynamo_Maestro    769
What the government want people to pay and what people pay are two different things, theres a lot of really nice loopholes that make it very easy paying very little tax

I am sure getting hold of a decent accountant / financial expert will point you in the right direction if taxes in the UK concern you

This isnt tax evasion either, a lot of these loopholes are available to everyone yet corporations seem to only get criticized when they take advantage :/

Dont read too much into taxes, its not as simple as "you pay X because of Y, or Z will happen"

Besides what exactly do parliament consider to be a video game, what do they consider to be British culture etc

I wouldnt worry about that article at all (or any article for that matter) the other week George Osbourne made a delightful hour+ thorough speech then spent hours answering questions, yet articles on the speech were short, simple and focusing on single quotes. Whatever this tax relief / proposal is you will likely have to keep track of it yourself via parliament itself and I can assure you it wont be a few paragraphs, avoid the media imo, they miss out important things all the time and twist words. Sometimes I think journalism requires a masters degree in Trolling

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alh420    5995
I'd imagine the rules are something along the lines that EU governments aren't allowed to subsidise industries without some kind of motivation, to not create an unfair market for the free movement of goods and services within the EU.
And about the only motivation that cuts it is that they are promoting something locally made and unique.
This kind of cuts are usually given to producers of some kind of local cheese or such thing.

So they have to invent a couple of rules to show that "We're not just promoting any game, we're promoting these special British games!" Edited by Olof Hedman

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way2lazy2care    790
Personally I am not a fan of the way it focusses on influencing the content of the game rather than the development of the game. That seems like the most stifling problem, not that it is necessarily unfair to people of other nationalities; that's the whole point of tax incentives after all.

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_the_phantom_    11250
[quote name='way2lazy2care' timestamp='1355325084' post='5009843']
Personally I am not a fan of the way it focusses on influencing the content of the game rather than the development of the game.
[/quote]

While you can score points that way as I pointed out above you can get 99% of the way there just by developing the game in the UK as games are currently developed.

For example if Angry Birds had been developed by a UK based company they could have qualified for this and that game is about as British as Mom's Apple Pie!

Pretty much ALL the comments here which have been negative have focus on the "British Culture" bit which is a pretty minor part of the scoring when all is said and done.

Besides would a bit more British influance in games REALLY be a bad thing? I mean, it would make a change from the "America are the greatest!!!!!" theme which runs though so so many games....
(Part of the reason I like the Modern Warfare series was because the basic game was 'US forces fuck up - British guy(s) save the day!' which was amusing)

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way2lazy2care    790
[quote name='phantom' timestamp='1355328978' post='5009868']
Pretty much ALL the comments here which have been negative have focus on the "British Culture" bit which is a pretty minor part of the scoring when all is said and done.

Besides would a bit more British influance in games REALLY be a bad thing? I mean, it would make a change from the "America are the greatest!!!!!" theme which runs though so so many games....
(Part of the reason I like the Modern Warfare series was because the basic game was 'US forces fuck up - British guy(s) save the day!' which was amusing)
[/quote]
I don't think it's bad, I just don't like artificially influencing art in any direction other than the artists' intentions. It cheapens the meaning imo.

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swiftcoder    18426
[quote name='way2lazy2care' timestamp='1355329259' post='5009870']
I don't think it's bad, I just don't like artificially influencing art in any direction other than the artists' intentions. It cheapens the meaning imo.[/quote]
Your publisher doesn't influence your art in any way? The feelings/desires of your audience doesn't influence your art in any way? The criticism of your peers doesn't influence your art in any way?

You can't create art in a bubble - art is informed and influenced by the world around it. What's one influence more or less?

It's not as if someone is holding a gun to your head and forcing you to create a British game. If your artistic integrity is worth so much, then you are free to fulfill the criteria in other ways (i.e. develop it in Britain, with a British team), or you can refuse the tax break altogether.

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_the_phantom_    11250
A decent write up on the situation as it stands : http://www.guardian.co.uk/technology/gamesblog/2012/dec/12/developers-tax-credit-legislation

Two key points;
1) This isn't the final draft yet so is likely to change
2) The film industry and the French games industry already operate under rules very much like this

There is also a good point in the last paragraph about WHY the causes are a good thing with regards to how tax money is spent.

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way2lazy2care    790
[quote name='swiftcoder' timestamp='1355330785' post='5009877']
Your publisher doesn't influence your art in any way?[/quote]
This is a straw man. The existence of something bad doesn't excuse the existence of something else bad. Sacrifices are usually required when one tries to balance art with financial viability, that doesn't make it an ideal situation.

[quote]The criticism of your peers doesn't influence your art in any way?[/quote]
Do you mean co-workers or people not involved in it's creation? For the former it would imply that I am THE artist rather than us, my coworkers and I, collectively being the artist. The definitely influence my contribution to the art, but collectively we should influence the art only as we collectively intend(in a perfect world anyway).

[quote]
It's not as if someone is holding a gun to your head and forcing you to create a British game. If your artistic integrity is worth so much, then you are free to fulfill the criteria in other ways (i.e. develop it in Britain, with a British team), or you can refuse the tax break altogether.
[/quote]
I think my point is being misrepresented. I'm not hurt by it, I'm just not a fan of using tax incentives to influence things that have little-no measurable impact on the society. Criticism is not the same as a call to arms.

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[quote name='L. Spiro' timestamp='1355272127' post='5009607']If the UK is forced to do it this way because of the EU, frankly I don’t get it but that certainly shifts the blame and the dim light. Why does the EU make it this way?[/quote]This should be rectified. The EU does in no way impose such a thing on the UK. What the UK is doing here is the same thing that Ireland has been doing for decades: An entirely legal and community-subsidized form of tax fraud. You take EU subventions under some cover (here it is the "culture" cover), and steal the highly competitive, high profit industry leaders from the rest of the community by offering them tax gifts.

Did you ever wonder why virtually every major company in the EU had their "official office" and the entire support division moved to Dublin little over a decade ago? One word: tax.

The only thing you could mock on is the fact that the EU is so stupid as to allow such a thing to happen, but that's just how it is. Similar could proably be said about what's happening with Greece and Spain, but alas, nobody has the balls to drive the hard course that would be necessary.
So it happens that the common man in Greece is still starving, and the rich are still not paying any taxes, and we're putting billions into a bottomless hole (covering banker's gambling debts and subsiding their luxury lives). Same in Spain where people are losing all they own after working for a life time, while the king goes on safari, hunting endangered species (and being proud of it). The only ones who aren't punished are those who lost the people's money.

All in all, it would be much more human to stop all of that, but this isn't how the world works.

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