UK Video Game Tax Cuts Sabotaged?

ninjacheeseburger writes "Develop recently published an article claiming that the UK government was put under pressure by one of the biggest game companies in the world to cancel planned tax breaks for video game developers. This company had apparently viewed game tax relief as a measure that would have given the UK an unfair advantage over other nations."

Comments

Doesn't say who the game company is

[Kitkoan]

But if I had to take a guess, oddly my guess would be EA...

Re:Doesn't say who the game company is

[crafty.munchkin]

from above TFS: "from the i-wonder-if-it-rhymes-with-shmactivision dept. "

Re:Doesn't say who the game company is

[Kitkoan]

Yes, that is another guess but so far its all just guesses. And I would question if it really is Activision since they are owned by Vivendi which is based in France so they might have something to gain with a closer tax break zone. EA on the other hand is only a US company so would have more to lose in theory.

Re:Doesn't say who the game company is

[Tharsman]

They dont want it to encourage competition.

Re:Doesn't say who the game company is

[Suiggy]

No, it was probably Activision/Blizzard, they're bigger than EA now, and Bobby Kotick, the CEO, is a big bully.

Re:Doesn't say who the game company is

[lostmongoose]

US only you say? This is from the article you linked. Studios all over the world including 2 in Britain. Try again. http://en.wikipedia.org/wiki/Electronic_Arts#Current

Re:Doesn't say who the game company is

[abigsmurf]

Doesn't make sense for it to be EA. They have Bright Light and Criterion in the UK. They would have a lot to gain from tax breaks and it would be easy for them to shift a lot of development from mainland Europe to the UK.

Re:Doesn't say who the game company is

[Verunks]

No, it was probably Activision/Blizzard, they're bigger than EA now, and Bobby Kotick, the CEO, is a big bully.

it's all steve jobs fault http://kotaku.com/5559201/a-delightful-chat-with-the-most-hated-man-in-video-games

Re:Doesn't say who the game company is

[sortius_nod]

Unfortunately linking a Gawker site ruins any credibility, funny, troll, or serious.

We all know it was Activision, after what Kotick did to Infinity Ward I wouldn't put anything past the fucktard.

He's destroying gaming brick by brick, and he knows it. All he cares about is how much money he makes, not any love of the games, industry or any altruistic reason. When someone comes out and says that a revenue stream for the company is it's lawyers, you have to think "do I really want to hand these guys my cash?". Worst thing is, that most don't think about that. The masses now game, so gaming companies care not for the culture, but for how many poor saps they can con into buying their products.

This story has done the rounds on many a gaming site and the general consensus is that it was Activision/Blizzard who stopped this massive tax break from happening.

I know I'm getting beyond TL;DR, but it's strange that a country trying to get out of recession would can a tax break that would have far reaching positive effects in the economy. I could only imagine how many development houses would gear up for major productions in the UK should this tax break go through. Then you see the trickle down effect give the economy a boost. It may not be as big as say opening a brand new copper mine, but it'll be a bigger shot in the arm than not allowing it to go through. The tax break would be offset no doubt by other taxes gathered from higher productivity.

The only reason to put a stop to this would be due to lobbying by a company (companies) that may be adversely effected by this. Maybe Activision are scared they may lose their top devs to new British start ups, maybe they'll lose them to already established British developers who can now afford more/better devs for bigger projects. It all makes sense. Then again, we'll never know. The new UK government is just as corrupt as the previous, and the next will be the same. As with all "developed" nations, the more money you have, the more you can corrupt the parliament.

Re:Doesn't say who the game company is

[KDR_11k]

I believe the tax break was only for "culturally British" games so neither Activision nor EA would benefit from it even with British studios.

Re:Doesn't say who the game company is

[amw]

The only reason to put a stop to this would be due to lobbying by a company (companies) that may be adversely effected by this

There is another alternative, and one that means the tin-foil hat can be left on its hook. Leaving in a tax break for an already profitable part of an economy would have left them open to critisism (and accusations, ironically, of underhand lobbying from the games industry), so what they've done instead is to distribute the breaks around a number of different parts of the small business economy; think of it as spreading the risk.

Thus, we have the lowering of corporation tax; potential (although I think currently undefined) breaks for companies setting up outside London and the South East; and, savings on National Insurance payments for new small businesses. VAT, which admittedly may hit the business-to-consumer games industry more than business-to-business industries, will still only add 85p to a £40 game.

Personally, I don't think the reason was lobbying. It was the realisation that they could actually use the Budget to help the entire small business economy - of which the video games companies are just a part.

Re:Doesn't say who the game company is

[Anonymous Coward]

http://www.develop-online.net/news/35094/Tiga-and-Activision-lobby-UK-MPs-for-tax-breaks

Activision actively lobbied for the tax breaks so it seems unlikely that it was all a work and they were secretly sabotaging. Despite your COD fandom rage.

Re:Doesn't say who the game company is

[AHuxley]

Think big and having contracts with the UK gov.
Would some 2 bit animated comic book set to music cubic sweatshop .com have the ability to suggest problems in the games area could flow over to existing projects in the UK?
Very few multinationals have the connections to shape policy, most band together after laws have passed, demanding changes and get laws scrapped via trade deals ect.
Trace the cash and leverage.

Re:Doesn't say who the game company is

[Verunks]

Unfortunately linking a Gawker site ruins any credibility, funny, troll, or serious

and this ruins your credibility, you read kotaku in the link and you didn't even read it, the article is an interview with kotick in which he talks about a meeting with steve jobs when he was young, not about steve jobs sabotaging the tax cut, this is a piece of the interview so you don't have to enter the dark land of gawker

"I was really scared about the meeting because he was like my hero," Kotick said. "I showed it to him and he started screaming at us. He threw it on the floor and said it was a piece of shit and then he started criticizing it."

Re:Doesn't say who the game company is

[Boltronics]

Impossible! Everyone loves shooting zombies, even if not as much as the British.

Re:Doesn't say who the game company is

[Anonymous Coward]

Just for the record, businesses can reclaim VAT - it's a consumer level tax, and one that's only applied to non-essential items. Food (unless consumed in a restaurant), Water, and Utilities are all VAT free.

That said, the change is from 17.5% to 20% - so in real terms about a fiftieth of the price. A £1 hike in the cost of a £50 game isn't really going to scare people off much.

Re:Doesn't say who the game company is

[amw]

Just for the record, businesses can reclaim VAT - it's a consumer level tax, and one that's only applied to non-essential items.

Yes - although I didn't explicitly state it, that was my reasoning behind it hitting B2C (specifically, because it lowers the spending power of the consumer) not B2B. That said, when Labour reduced VAT temporarily from 17.5% to 15%, I don't recall the (admittedly potentially biased) media reporting a massive upswing in spending, so I can't see that this increase will cause a massive downswing.

Food (unless consumed in a restaurant), Water, and Utilities are all VAT free.

Unfortunately, you appear to have been misinformed. VAT on electricity and gas is charged at 5%. Depending upon the type of food, it may either be zero-rated or full rate. Mains water may be zero-rated, but mineral water has VAT applied at the full rate. It's a bit of a minefield, but HMRC does explain it comprehensively.

Re:Doesn't say who the game company is

[telchine]

from above TFS: "from the i-wonder-if-it-rhymes-with-shmactivision dept. "

I wonder if it rhymes with Electronic Farts?

Re:Doesn't say who the game company is

[Xest]

Interesting read, and a good insight but personally I suspect the guy wasn't being sincere. His suggestion that his comments get taken out of context because they were meant for investors is one thing, but his fundamental problem is that his words have carried through into the games his firm churns out. The fact is he has taken the fun out of some series, he is trying to charge more for some games.

So how can gamers view his comments as being merely taken out of context, when his comments have been followed through in cold hard actions? Why is the next Call of Duty pre-order already £5 - £10 more in price than any other 360 game from other manufacturers? He is ripping customers off, that's the problem.

So if the story is true, I also wouldn't put it past him to be the one to lobby against a tax break either. Despite that, there is one other possibility that hasn't been mentioned here though- Ubisoft.

Ubisoft seems to be the only publisher away from Activision, Take-Two, EA, MGS that don't have a prescence in the UK. Ubisoft have also been the biggest takers in taking advantage of Canada's video game developer tax breaks so perhaps they're concerned about others getting similar breaks to them now they've invested so heavily in moving a ton of their developers to Canada already. So despite Kotick's attitude, he has something to gain from a UK tax break in having two studios here who would benefit from it, Ubisoft have nothing to gain from a UK tax break it would appear.

Re:Doesn't say who the game company is

[Anonymous Coward]

Well, that would include Harry potter (EA) and James Bond (Activision). Coming up with more culturally british titles wouldn't be a problem either.

And it's not like a rical product toaly displaces a sale of one of their products.

Re:Doesn't say who the game company is

[Suiggy]

Excuse me, but does it look like I was supporting Activision/Blizzard? I mentioned that Bobby Kotick, the CEO of Activision, is a big bully and that it was probably Activision who lobbied the UK. And according to what you posted, I was correct. Does that mean that I'm sucking up to Activision and stroking Bobby's dick for more COD games? No.

Re:Doesn't say who the game company is

[Anonymous Coward]

He goes by Darth Kotick now.

disadvantage..?

[danny_lehman]

really?.. they wouldnt be the first country to put tax breaks in for creative sectors.. seems like the Other countries already have the unfair advantage over the UK.. this would be more like leveling the field.

Re:disadvantage..?

[JackieBrown]

I thought tax breaks only hurt the poor and corporations should never be entitled to them? At least, that is what the mainstream media (and many Slashdot comments) keep telling me.

Certainly you are not suggesting that the UK should compromise its enlightened principles?

Huh?

[dakameleon]

What genius in the newly-minted government thought, "Oh dear, we might be giving an unfair advantage to a premier entertainment industry sector of the 21st century, we mustn't have that in little old England, what?"

And here I was thinking only the US and Australia had truly effective lobbyists who could convince the government to act in their interests instead of the country's.

Re:Huh?

[Burnhard]

Don't you think the treasury ran the numbers on whether it was worth it? We're borrowing £500,000,000 per day for goodness sake!

Re:Huh?

[El_Muerte_TDS]

Do you think the UK treasury can run numbers? You're borrowing £500,000,000 per day for goodness sake!

Re:Huh?

[CaseM]

What genius in the newly-minted government thought, "Oh dear, we might be giving an unfair advantage to a premier entertainment industry sector of the 21st century, we mustn't have that in little old England, what?"

The one that got something in return.

And the other half of the story...

[Hadlock]

The economy is bankrupting the UK. Fark puts it succinctly: "Facing a massive budget deficit, the UK to cut welfare, increase the VAT to 20 percent, and impose a new tax on anyone who brings one of those damn vuvuzelas back from the World Cup". Chancellor George Osborne is doing what all countries should do in that situation but are afraid to do, due to the unlikelihood of reelection. The country is damn near bankruptcy, the whole European continent is over-leveraged on debt and Britain is doing their best to make an example by balancing their budget. Tax handouts to the entertainment industry don't help balance the budget. Insert snarky comment about US legislators growing some balls and balancing our budget here...

Here's some more info on the subject:

from the NYT http://www.nytimes.com/2010/06/23/world/europe/23britain.html?hpw

Britain Unveils Emergency Budget

LONDON -- Setting the scene for years of potential strife with the powerful public-sector unions and their allies in the Labour Party, Britain's new coalition government on Tuesday unveiled the most severe package of spending cuts and tax increases since the early days of Margaret Thatcher's era.

George Osborne, the chancellor of the exchequer, held the budget box as he left 11 Downing Street for Parliament on Tuesday.
After only six weeks in office, the government of Prime Minister David Cameron took what his coalition of Conservatives and Liberal Democrats acknowledged was a historic gamble: that austerity measures will help balance the government's books without pitching the country into a double-dip recession.

The cuts and tax increases, including average budget reductions of 25 percent for almost all government departments over the next five years, will make Britain a leader among European countries, including Ireland, Greece and Spain, competing to show they can slash spending and appease investors worried about surging debt. But the sharp reductions defy conventional economic wisdom, which holds that governments should increase spending to stimulate growth when the private sector is weak.

The steps outlined to the House of Commons by George Osborne, the chancellor of the Exchequer, would cut the annual government deficit by nearly $180 billion over the next five years, shrinking Britain's public sector and instituting tough reductions in public housing benefits, disability allowances and other previously sacrosanct aspects of the country's $285 billion welfare budget.

Only health and international aid spending would be protected from the 25 percent cuts for government departments by 2015, the steepest fiscal spending reductions since the 1930s. Mr. Osborne also announced a two-year wage freeze for all but the lowest paid among Britain's six million public servants and a three-year freeze on benefits paid to parents for rearing children, in addition to new medical screening for people claiming disability benefits, part of a bid to cut $16 billion from the annual welfare budget.

Mr. Osborne also announced a raft of tax increases, though he was at pains to say that the government's plan to sharply reduce the country's $1.4 trillion national debt would rest on making roughly four pounds in spending cuts for every pound in tax increases, a point of considerable political weight in a country that is already among the highest-taxed in Europe.

The new taxes include an increase next year to 20 percent from 17.5 percent in the value-added tax on most goods and services, and an increase in the capital gains tax, to a new high of 28 percent, to curb what Mr. Osborne described as rich people in Britain "paying less tax than the people who clean for them." At the same time, changes in income tax will remove nearly 900,000 of Britain's poorest people from the income tax system altogether, and corporate taxes will also be reduced over a five-year period, to 24 percent from 28 percent.

"I

Re:And the other half of the story...

[Anonymous Coward]

You might at least edit your repost slightly..
http://slashdot.org/comments.pl?sid=1695052&cid=32662554

Re:And the other half of the story...

[Hadlock]

Slashdot might as well add that "slight" important fact. The second time around. Instead of spinning it poorly. Makes me think they've got Doctorow* at the reins these days....
 
*Same as John Katz

Re:And the other half of the story...

[Xest]

To be fair though, the tax break was only something like £40 mill. If the UK had attracted additional game developers to the degree Canada has from it's tax breaks for game developers it could've easily made that back in tax and then a whole lot more.
If this tax break was dropped as part of the fiscal responsibility plans I imagine that they decided that a £40 mill break wasn't enough to attract additional developers, and they'd likely have had to offer higher breaks to attract developers for it to be worth it, making it a more risky path. The other possibility is that the £40 mill would only benefit existing studios, as new studios would take at minimum a couple of years to set up and get products out there it may be that waiting 2 years for the benefits of the tax break to be realised whilst in the meantime existing studios are getting a break for nothing wasn't seen as acceptable. It could possibly have been decision made for short term gain at the expense of the longer term too then.

So you could well be right then, it could be for fiscal responsibility but its not as if tax breaks are done for the benefit of industry over the country, they're done as a calculated way of increasing tax income by attract more companies to the country setting the tax break than would otherwise be there with the goal being it's win-win for everyone- the industry pays less tax, but the industry is bigger so the tax income is greater overall.

Whilst I agree the TFA is so light on details it does indeed stink of bullshit, I am somewhat suprised that they feel the tax break wouldn't have helped. The games industry is such a massive sector, and still has so much room to grow, particularly with the rise of gaming on the new more powerful mobile handsets hitting the shelves this last few years, and the rise of casual gaming on consoles. Attracting more devs, and preventing more leaving for places where there are tax breaks for their industry would surely have benefited the country, and helped in reducing it's debt in the long run at least.

Re:And the other half of the story...

[KibibyteBrain]

Increasing the VAT will barely raise revenues if it does at all; it will mostly just lead to less consumer spending. A "handout" for the games industry might encourage a studio or two to move to or increase its operations in the UK, which would almost certainly raise revenues at least directly, maybe even net them some direct tax, and the halo effect on the surrounding economy from new jobs and investment cannot be underestimated. And I'd assume it would be a relatively effective incentive measure vs. using similar incentives for other industries as AFAIK they'd be the only nation with such a program.

Re:And the other half of the story...

[abigsmurf]

However a large portion of the budget would have been sorted out before the Tories came into power, the rest of it being nasty surprises left by Labour and some manoeuvring to keep the Lib Dems happy (the increase in allowance for the lowest tax band being a big issue for them).

However, these tax breaks for the gaming industry were not only pre-election pledges, they were pre-election pledges for both parties.

This whole thing has annoyed me so much I actually filed a FOIA request with the house of commons asking for the minutes of every meeting this was discussed and records of all the advice/lobbying done by external companies. It should hopefully provide strong evidence about which company was responsible for shooting this down at the last second.

My personal belief is that it's Ubisoft who were behind this. Given their presence in Canada and the rest of Europe, they would be hurt most by a UK based brain drain. They do however have a single UK dev house and said in an interview they were in favour of the tax breaks (although that doesn't mean they weren't being two faced ).

Re:And the other half of the story...

[Hognoxious]

Increasing the VAT will barely raise revenues if it does at all; it will mostly just lead to less consumer spending.

So you've calculated the price elasticity of demand for every product in the economy and combined them into a weighted average?

If you did that in your head I'll be really impressed.

Re:And the other half of the story...

[L4t3r4lu5]

Nah, he had inside information. That's George Osborne's /. account! :D

Re:And the other half of the story...

[Hognoxious]

However, these tax breaks for the gaming industry were not only pre-election pledges, they were pre-election pledges for both parties.

O RLY?

http://www.mcvuk.com/news/38468/No-game-tax-breaks-in-Tory-manifesto

http://www.guardian.co.uk/media/2010/apr/12/labour-manifesto-libel-legislation

Re:And the other half of the story...

[xaxa]

- From April 2011, the threshold at which employers start to pay National Insurance will rise by the rate of inflation plus £21 per week.
- Corporation Tax will be cut next year to 27%, and by 1% annually for the next three years, until it reaches 24%.
- The small companies' tax rate will be cut to 20%.
- Tax relief for the video games industry will be scrapped.
- People setting up new businesses outside London, the South East and the east of England will be exempt from £5,000 of National Insurance payments for the first 10 workers.

They've cut the tax for all small businesses, and any small business outside South East England (inc. London) pays even less tax. After doing that, they say the tax benefit for games companies isn't necessary. They do lose the marketing effect, but isn't the UK known as somewhere where it's reasonably cheap to set up a business anyway?

Re:And the other half of the story...

[spamuell]

Increasing the VAT will barely raise revenues if it does at all

Even if you're correct, it doesn't matter. The point of the VAT rise and the emergency budget in general is to secure investor confidence so that the UK can continue to borrow cheaply. People think the VAT rise will raise revenue, ergo they are happy to continue to lend to a country they are convinced will be able to repay them.

Re:And the other half of the story...

[abigsmurf]

YA RLY

http://www.develop-online.net/news/34341/Tories-come-clean-Well-offer-tax-cuts-in-first-budget

http://www.computerandvideogames.com/article.php?id=244938

Re:And the other half of the story...

[Rogerborg]

Y'all going to cut-and-paste this exact same copyright violation into every UK or economics article from now on?

Re:And the other half of the story...

[Pharmboy]

The math is pretty easy in a recession with high unemployment: any additional tax reduces consumption. It isn't like everyone is walking around with spare cash. When times are booming, not so much.

Re:And the other half of the story...

[Anonymous Coward]

NO WAI!

Re:And the other half of the story...

[cduffy]

Right, but whether this is worthwhile depends on by how much.

That's why one must, as the parent said, calculate the price elasticity of demand to determine whether a tax will in practice increase or reduce revenue.

Re:And the other half of the story...

[neonKow]

Except I trust lenders to do their homework on a financial situation more than I trust random slashdotters. Your idea is to TRICK them into lending when you can't even sneak it past slashdot?

Re:And the other half of the story...

[Hadlock]

Unless you want to rewrite it for me?

Re:And the other half of the story...

[Rogerborg]

I was rather hoping you'd title it "INCREAS UR PENNIS SIZEE 4 INCHAS OVERNITE!!!!" so that we can identify it as the spam that it's rapidly becomnig.

Re:And the other half of the story...

[Hadlock]

Then report it to an admin as spam and stop wasting everyone's time

Re:And the other half of the story...

[Anonymous Coward]

calculate the price elasticity of demand to determine whether a tax will in practice increase or reduce revenue.

He doesn't even know what that means. Neither, apparently, do the mods.

Re:And the other half of the story...

[Hognoxious]

Let's say that at a tax rate of 10%, sales are 110. Tax revenue then equals 11.

The tax goes up to 11%. Sales drop to 100. Tax revenue then equals ... 11 again.

But if they only drop to 105, the government is quids in; it's taking in 11.55.

Alternatively if sales drop further, to 95, the the tax take will only be 10.45 - oh noes!!!

Now this is an important concept, so it needs a name. It's kind of like adding weights on a spring - and as any fule Kno some springs are stiffer and don't extend or compress much, and others are well stretchy. So we'll call this concept stretchiness.

    - - -

The situation is further complicated, because it turns out that, according to Morrissey's law, some things are stretchier than others.

Common unstretchy goods are necessities and things that are addictive; you don't have the option, so you just pony up.

Others are quite stretchy. This happens when you can easily cut back, or do without it completely - for example, by switching to something else.

Now, with all these stretchy and unstretchy things around we need to find the overall level of stretchiness. And some of those things sell a lot, and others not so much. It's like kids on a see-saw - a fat kid has a lot more effect on the overall balance than a thin kid.

    - - -

So we'll stick the two concepts together and call it The kids on a see-saw stretchines, mmmmkay?

Re:And the other half of the story...

[Hognoxious]

Neither of those is a manifesto pledge, cellar dweller.

Re:And the other half of the story...

[Pharmboy]

The important thing to remember is that when people (on average) are making LESS than they did a year ago, they are barely getting by. For simplicity, if in 2009, for every $110 they paid 11 and spent 99, fine, and they consumed all of it. Now they are making 88 and paying 8, thus spending $80. They have already reduced their spending because they had no choice, and there is no longer "disposable" income as it takes the $80 to just pay the basics. Now you increase the tax, you are biting into basics, forcing them to make tougher choices. More importantly, once they make these choices, they *ARE* more likely to try to overcompensate and actually put money into savings, even if only a dollar or two. (this is proven in that the savings rate in the USA is currently at a historic high: saving for an even rainier day, even though they have less money available.)

So you raise taxes to 12.5%, so that $88 becomes $11 again, and they have a net of only $77 to spend, instead of 80. To make it worse, the savings rate goes up, they only spend $75 of that money. Even if the tax collection might be similar, they are only injecting a net of $75 into the economy instead of the previous $99. The money they inject is what is (was) paying the salaries of other people. Final result is higher unemployment. People argue "but the extra taxes are money spent as well", but as you can see, there are no extra monies, the net for the government is the same for this one person, and less overall as more people are unemployed.

The fact is that government spending can create a few jobs, but they tend to have a lower ROI than the same money spent in the private sector, as there is no "profit" motive in the public sector. In the private sector, the money is more likely to be invested in longer term projects: newer computers, larger building, more vehicles, the very things that benefit the economy as a whole.

The net is what I was speaking of: Any additional tax during a recession reduces economic activity. The most basic concept is tied up as "If you want to discourage something, tax it. If you want to encourage something, reduce taxes on it". Whether it is liquor, tobacco or jobs, it generally holds true.

Re:And the other half of the story...

[Anonymous Coward]

Real life is more complicated. If the UK didn't raise tax's and reduce its deficit, the GBP would get its credit rating downgraded by the ratings agency's. You would then see a run on the pound, and the cost of imported goods (we are only a tiny island) would shoot through the roof and the UK would have hyper inflation, which would reduce consumption a tad more.

Re:And the other half of the story...

[cduffy]

He doesn't even know what that means.

Seriously? That one was high school economics.

We did give them a tax cut!

[Manip]

The UK did give the Games industry a tax cut; small businesses and large businesses received a massive break in terms of what they have to pay. All this games tax relief would have done is given large UK games companies a third tax cut.

Currently they don't have to pay NI on the first 10 employees, pay less tax before they are up to corp' tax levels, and even when paying corporation tax they have to pay less than any other western country.

Re:We did give them a tax cut!

[LordAndrewSama]

We have to be this generous to attract talent, it's not like people move here for the weather or civil liberties :)

Re:We did give them a tax cut!

[Hognoxious]

Depends where you're standing as to whether it's Western or not, but it's 10% in Macedonia.

Re:We did give them a tax cut!

[Anonymous Coward]

They move here for the footba... never mind.

Re:We did give them a tax cut!

[Anonymous Coward]

And what about Banker's Bonuses? The bankers regard them as guaranteed, irrespective of performance. In the real world with real small companies, the tax people regard guaranteed bonuses as salary, taxed at a higher rate.

All that and these corporations still say the UK is socialist. Maybe it is neosocialism - Welfare for the Wealthy, Penalties for the Poor.

Re:We did give them a tax cut!

[Anonymous Coward]

What exactly is the problem? The US subsidizes and tariffs everything to give their industries an advantage. Now UK is doing the same for their Games industry.

Doesn't name nay names

[euroq]

The story doesn't make any sense, frankly.

They didn't bother to name "who" opposed/sabotaged the tax break, even though the only entity which could oppose it, according to the gist of the article, would be an outside entity, because only an outside entity would imply an unfair advantage towards UK gaming companies. But why would the outside entity not be named, if it is a UK article about UK gaming companies? How could an external company actually persuade UK politicians that it would be an unfair advantage to UK citizens that it would be unfair for a non-UK gaming company to have tax breaks?

I'm not saying ANYTHING on whether or not the tax break would be good or not; I'm saying it doesn't make sense that an external entity exerted their "power" to persuade UK politicians that it would be bad for the UK gaming industry if they were given tax breaks. I'm saying that it only makes sense if it were a UK gaming lobby which persuaded them.

Re:Doesn't name nay names

[cappp]

The Independent supplied a few numbers:

TIGA [trade organization] estimated that the tax benefits would have cost the Government £192m over five years, bringing £415m to the Treasury in tax receipts alone.

Perhaps it was simply felt that there was better bang for buck elsewhere?

Anyway the underlying logic in the claim is a little confusing. How would the UK be accused of unfair competition if Canada offers the same kind of deal?

Re:Doesn't name nay names

[Anonymous Coward]

I'm saying that it only makes sense if it were a UK gaming lobby which persuaded them.

That wouldnt make sense what so ever, since the UK gaming lobby would be shooting themselves in the foot. What happened here is, some big nameless gaming company (without an office in the UK), said - hey this tax cut is unfair. The politicans looked at the situation, and decided, you know what it is unfair & we've almost bankrupted the country, so we'll take back this tax break.

Re:Doesn't name nay names

[_Shad0w_]

Actually that would be "and the previous government bankrupted the country so we need to save money somewhere; this is as good a place as any".

Re:Doesn't name nay names

[TheRaven64]

Perhaps it was simply felt that there was better bang for buck elsewhere?

That's not really how it works. If such a tax cut would really have produced a greater income than it would have cost, then it wouldn't matter if there were better returns elsewhere - it's self financing, so you can do the other things as well. And, because it's a tax cut, the real numbers only appear in a year's time - the predicted increased income goes on the forecasts along with the predicted loss in receipts.

More probably, they decided that TIGA's numbers were not realistic and that it would not generate a net increase in income.

Re:Doesn't name nay names

[amw]

How could an external company actually persuade UK politicians that it would be an unfair advantage to UK citizens that it would be unfair for a non-UK gaming company to have tax breaks?

(Did you mean 'for a UK gaming company? I got confused with all the negatives.)

I think this is an important question, whichever way it was meant. Nothing in TFA itself convinces me that this is anything more than an attempt to stir up some publicity for the individual who wrote it.

A question that Develop should answer: why are you not naming the company in question? Possiblity of legal action (as you have no evidence), or because they don't actually exist?

Well we always knew

[Chrisq]

Well we always knew that the tories would do anything for a back hander. Just look at how many of the last lot ended up in prison

Re:Well we always knew

[somersault]

Yes, because we all know objectively that [your chosen political party here] is perfect and [any other political party] are immoral scum, and would plunge the earth into darkness, illiteracy and overabundance of [insert bad thing here] if they regained power.

Am I doing it right? Perhaps not polarised enough, and I need to detach from reality a little more?

Re:Well we always knew

[TheRaven64]

No, you're doing it wrong. You seem to be confusing it with the US political system. In the UK, we have three major parties:

• Labour MPs are incompetent.
• Tory MPs are criminals.
• Lib Dem MPs are ineffectual.

Other MPs are statistically irrelevant. We've just traded the incompetent for the criminal and the ineffectual. This might be an improvement, but it's difficult to tell at this stage.

Re:Well we always knew

[petermgreen]

Other MPs are statistically irrelevant.
Normally that would be the case but afaict those "other MPs" are why we ended up with a tory+lib coalition. lab+lib would have more seats than the tories but would not have got an outright majority due to the presence of smaller parties.

Why tax cuts for the video game industry?

[hkmwbz]

I'm probably missing something, but why would the video game industry get special tax cuts? Is it because they can't sell enough games to cover the costs?

In that case, the video game industry should cut costs and make games people want to buy, yes?

Nintendo, for example, seems to be doing just fine. Maybe their strategy of expanding the market is the right way to do things, rather than expecting handouts from the government?

Re:Why tax cuts for the video game industry?

[Sockatume]

Tax cuts are used to encourage investment in a given field, to encourage a small-but-profitable industry to become larger. Industry growth create jobs which creates spending etc. etc., and when the taxes are switched back on, you now have more games companies paying taxes to the government. That "pays back" the money they lost by cutting taxes. It's only something you'd use in a nascent area, you wouldn't use it on an industry (North Sea oil exploration, say) that's as big as it's going to get for obvious reasons.

Re:Why tax cuts for the video game industry?

[TheRaven64]

I'm probably missing something, but why would the video game industry get special tax cuts? Is it because they can't sell enough games to cover the costs?

No, it's because the industry is relatively successful and a tax break now would provide stimulus for increasing foreign investment and expansion of the industry. At least, that was the argument for the cuts. On the counter side there are the questions of:

• Where would this foreign investment come from when the rest of the world's economy is not really in such a great state?
• Is expansion really possible for an industry that produces luxury goods in a recession when spending on luxuries is typically reduced?

Presumably the government decided that the answers to these questions were 'nowhere' and 'no', respectively.

Re:Why tax cuts for the video game industry?

[Anonymous Coward]

If they can't sell enough games to cover costs, then they won't have any tax liabilities to begin with.

Income tax increases (from a corporate tax perspective) do not decrease profits because they are applied to profits in the first place.

Re:Why tax cuts for the video game industry?

[Anonymous Coward]

If they want small but profitable business to grow and become larger, then wouldn't it be more prudent to encourage ALL small businesses rather than just a business that is largely controlled by a small group of multinational companies.

The reason why our tax codes are so complex is because of crap like this.

As far as paying back for the paying back, since when is the video game industry nascent, it has been around for decades, is starting to compete with the movie industry for production dollars, and is known as an industry that treats its employee's like slaves.

Re:Why tax cuts for the video game industry?

[hkmwbz]

So they just want more profit? If the gaming industry is doing fine and is profitable, why are tax breaks needed?

Wait...

[BlueStrat]

"...This company had apparently viewed game tax relief as a measure that would have given the UK an unfair advantage over other nations."

Wait...over here in the US they're telling us that increasing taxes is an economic stimulus and will create jobs, stimulate investment, and grow the economy. Wouldn't increasing the gaming software sector's taxes be an incentive for growth instead of a burden if that's true?

Strat

Re:Wait...

[somersault]

over here in the US they're telling us that increasing taxes is an economic stimulus and will create jobs, stimulate investment, and grow the economy.

Well, in the US that could be true if they continue to use taxes fund international wars, and employ everyone in the creation of bigger and better weapons.

Re:Wait...

[Homburg]

Which taxes are increasing in the US, exactly? The economic stimulus involved hundreds of billions of dollars of tax cuts .

Re:Wait...

[Anonymous Coward]

It's okay. The magic money fairy (Bernake) will just wave his magic wand a make billions of dollars appear. No, dumbfuck, your kids are goign to be paying for this for the rest of their lives. Obama has managed to take everything bad that Bush did, and multiply it.

Re:Wait...

[Anonymous Coward]

"...This company had apparently viewed game tax relief as a measure that would have given the UK an unfair advantage over other nations."

Wait...over here in the US they're telling us that increasing taxes is an economic stimulus and will create jobs, stimulate investment, and grow the economy. Wouldn't increasing the gaming software sector's taxes be an incentive for growth instead of a burden if that's true?

Strat

Offtopic!?!? C'mon mods!

The parent post quoted directly from TFA and commented directly on the topic it concerns, and that's "Offtopic"!?

I thought this was Slashdot, not HuffPo.

Re:Game companies should come to India instead

[somersault]

The UK is good for exporting haggis, but India is the IT bread-basket of the West.

You're either a very good troll, or an extremely obnoxious prick. Actually, it could be a bit of both.

Re:Game companies should come to India instead

[Anonymous Coward]

Yeah, but then they'd have to start redesigning multiplayer so that it would only match you with the same caste!

Depends on your perspective

[Anonymous Coward]

You're either a very good troll, or an extremely obnoxious prick. Actually, it could be a bit of both.

Would you consider politically poignant with an infusion of satire? Reality is more droll than it appears. Like any good (verbal) artist, I merely REFLECT reality, I don't create it.

Though I'd be in favour of a trade war based on video game subsidies.

Singed,

the GP

Re:Depends on your perspective

[somersault]

Reality is more droll than it appears

Sure it is :) I guess you just hit a nerve though, because I found the post more offensive than funny, due to it reflecting reality so well.

Re:Depends on your perspective

[Hognoxious]

Singh,

the GP

FTFY.

Videogames on the UK.

[Tei]

Teenages are a dificult people because need to explore how fit on the world. Countrys are somewhat like that, because has to fit in the world. Lets look at the japanese, for a success story, from the medieval ages to industrial ones, really quickly. A country with not natural resources, but a powerfull industry. Other countrys rich in resources are poor. Countrys like Irak are poor in a way, even with the oil.

The UK not invented the videogames, but is a area where the UK culture can kick in, and be amazing. So UK is usefull to the world, and videogames are part of it. So videogames are more important for UK that what we see nowdays.

Of course, the Americans will build giganteous industries, and will bully everyone outside of the area. Maybe you have to fight that, if you want something to do in life. Leting the americans suck another industry away for thenselves, is bad for USA, is bad for UK and is bad for the world. "Blockbusters" could be a good industrial thing, but is poor enteirnament. Good production values are a nice thing to have, but what about soul? what about deep? what about FUN?. Blockbuster games are (in a way) like Soviet era buildings: devoid of life.

So UK, please, fight this battle, preserve your cultural significance here in the videogame world.

Re:Videogames on the UK.

[Anonymous Coward]

Teenages are a dificult people because need to explore how fit on the world. Countrys are somewhat like that, because has to fit in the world. Lets look at the japanese, for a success story, from the medieval ages to industrial ones, really quickly. A country with not natural resources, but a powerfull industry. Other countrys rich in resources are poor. Countrys like Irak are poor in a way, even with the oil.

Yeah Japan is really a model teen, except for that rather Emo-ish isolation phase they went through, followed by some rather violent delusions of grandeur, and the fact that they are now a certifiable workaholic with at least one recent fairly bout of burnout.;)

UK Weather is a BONUS for IT

[SmallFurryCreature]

Remember, the zero percent chance of sunshine is a bonus to nerds who prefer damp dank dark basements to ply their neferious trade.

Putting a game company on Hawaii is a surefire way to not get any talent what so ever. Proof? Name a single game company from a lush tropical paradise.

Nope, instead they are from the coldest frozen wasteland in the world: Canada. Nothing like sub-zero temperatures and a complete absence of sunlight for half of the year to drive a coder to his warm PC and start cranking out software.

Open a development shop on the north-pole and you will get the best MMORPG ever produced in six months time.

Re:UK Weather is a BONUS for IT

[Anonymous Coward]

You say that but I am stuck inside a development house in London and it is blazing sunshine outside with blue (slightly hazy) skies. London has very little rainfall compared to many other large cities.

Re:UK Weather is a BONUS for IT

[xaxa]

Remember, the zero percent chance of sunshine

There's been non-stop sunshine in south-east England for the past couple of weeks. Being English, we've started to moan about it (garden could do with some water, fed up with the humidity and 28'C heat, etc).

Take a look at the weather forecast. Current observations at 11:00: completely clear sky, 23'C, 3 km/h wind.

Re:UK Weather is a BONUS for IT

[Anonymous Coward]

By 6 month you mean about 180 days? That would be 180 days and 180 nights in north pole?

I can see your point.

Re:UK Weather is a BONUS for IT

[jimicus]

Remember, the zero percent chance of sunshine is a bonus to nerds who prefer damp dank dark basements to ply their neferious trade.

They might be a bit disappointed to discover that very few UK houses have basements then.

Re:UK Weather is a BONUS for IT

[nomadic]

There's been non-stop sunshine in south-east England for the past couple of weeks. Being English, we've started to moan about it (garden could do with some water, fed up with the humidity and 28'C heat, etc).

There's a big difference between UK sunny and sunny sunny. Trust me, the sunny you get there is a pale imitation of real sunshine.

Re:UK Weather is a BONUS for IT

[xaxa]

There's a big difference between UK sunny and sunny sunny. Trust me, the sunny you get there is a pale imitation of real sunshine.

I have left this country, you know ;-). Yes, we're at 53 degrees north or so, but there's still a completely clear sky and hardly any breeze right now.

According to these tables: 40 degrees, 56 degrees there's actually more solar radiation here than in, say, the USA at this time of year (because of the longer day) and only a very slight reduction in the peak sunlight -- 279 rather than 271 units.

Re:UK Weather is a BONUS for IT

[neonKow]

They can make do with dungeons.

Re:UK Weather is a BONUS for IT

[nomadic]

The majority of the US is below the 40 degree latitude line; I spent half a summer in London, and half in Miami and the difference was extreme...

Re:UK Weather is a BONUS for IT

[xaxa]

(Use the 32 degree table if you prefer.)

Climate and weather in a particular area is more than just sunshine.

Re:UK Weather is a BONUS for IT

[Anonymous Coward]

28 degrees, that's fucking cold.

Who could have?

[AHuxley]

1. Has to have pull with UK gov and parties.
Both political side and the public service ie the Jim Hacker's and Humphrey Appleby's.
2. Has to have had a track record of trying this and getting away with it.
lets see, dislikes free hand outs from any foreign gov, has the size to get access and press for it and makes games?
Well all I can think of is Japan and its Tron efforts. The US gov seems to have made it clear that an OS backed by gov funding was bad. Perhaps games backed by a gov could also be bad in 2010?
Would the same mindset and reach from the 1980's personal computers still be around today in gaming?
http://en.wikipedia.org/wiki/TRON_Project

Based on England's poor World Cup result...

[pandrijeczko]

...I would rather see the money from the tax breaks going to finance local sports and getting kids interested in kicking a ball around so that we have some chance in the next 20 years of putting together a national football team worthy of wearing the "Three Lions".

Re:Based on England's poor World Cup result...

[JohnBailey]

...I would rather see the money from the tax breaks going to finance local sports and getting kids interested in kicking a ball around so that we have some chance in the next 20 years of putting together a national football team worthy of wearing the "Three Lions".

Even fantasy has to have some limits..

Re:Based on England's poor World Cup result...

[Anonymous Coward]

fuck football you idiot

Re:Game companies should come to India instead

[TheRaven64]

Please mod parent up. I would like to encourage more US companies to outsource to India. As a UK resident, I am currently doing pretty well charging US companies ten or more times as much to fix code as the Indian companies that originally charged to write it. The more US companies outsourcing development to India, the better for the British economy.

And this is why democracy sucks

[SmallFurryCreature]

The UK is near bankrupt, it is involved in two wars, three if you count Ireland were the peace process is measured by the number of people killed. It is production is in shambles and the economic sector in ruins. It can't pay for its welfare or its healthcare. It politics are divived up with the conservatives now having to rule with the liberals and all this guy thinks of is to get kids playing soccer so the national team has a chance. Oh yeah, that is worth paying taxes for.

Amazing. Bread and circusses, it still seems to work.

Re:And this is why democracy sucks

[night_flyer]

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship. - Unknown

Re:And this is why democracy sucks

[pandrijeczko]

I'm not actually a football fan and in my 48 years I've never once been to a professional football match, nor have I supported any football teams since I was about 12 years old and at school - the closest I get to being a sports fan is watching the occasional rugby match.

However, given the choice of seeing my taxes sunk into the pockets of fat American games company CEOs or seeing it used for getting kids playing sport so that we can hopefully have some excellent sportsmen and women (not the primadonna celebrities we have currently), I choose the latter.

If anything, its the power of corporations like banks and outsourcing technology companies that have caused this crisis in the first place, so I'm buggered if I want to see more of my taxes being used to bail out those greedy bastards.

Re:Game companies should come to India instead

[Anonymous Coward]

He's a troll.

The day I get an e-mail with English that coherent from an Indian IT worker is the day I'd be inclined to agree with him.

You should be modded informative

[Chrisq]

You should be modded informative. This sums up the major political parties perfectly.

Re:You should be modded informative

[Anonymous Coward]

Almost, I'd have said that Labour are incompetent criminals, given that they currently have some members about to go on trial (that and they keep letting Mandleson back in).

Seriously?

[bistromath007]

This is the most disingenuous horseshit I've ever read. A McDonald's employee could figure out that the big fish is trying to crowd out indie devs. It's the same way any other industry works.

Quid Pro Quo

[CaseM]

So what was given in return for 86'ing the tax incentives, hmmm?

Re:Game companies should come to India instead

[Anonymous Coward]

This is my LAST post on Slashdot. Most people I'm sure would be grateful. You IDIOTs who marked me Troll will never see me again. Slashdot is a waist (sic for all the grammar Nazis who can only argue through logical fallacies). If people can't tell the difference between a Troll and a very thoughtful analogy that took over an hour to refine, then something is VERY, VERY wrong.

You people are VERY quick to insult me (when you don't have Moderator points). And VERY quick to moderate up VERY simple, thoughtless, and generally very Right-wing biased arguments. I know, I'm a Loser and an Idiot, as you often call me. I'm not good enough to be here. So no more for me. I no waiste my time, and YOU no waiste your time. Have fun in your homogeneous geek-fanboy gather-place.

The EU competition commission?

[Kupfernigk]

Look up State Aids. It's less than likely to be a lobbyist, and more likely to be m'learned friend dropping a word in George's ear about having lunch with Joaquín Almunia, on behalf of a non-UK based developer.

Re:The EU competition commission?

[dakameleon]

Surely the competition commission will be looking at competition between private enterprises and what government is doing to foster that, rather than trying to equialise competition between countries? It's not like tax laws are uniform across the Union to begin with, and it's not as though other Union members don't subsidise or otherwise champion specific industry sectors.

Were the competition commission's approach to be based on consumer interest, the response should be something along the lines of "it's up to you to compete with that." It's not like the UK is dominated by a single developer/studio/publisher, and you can only imagine a tax break like this would encourage further competition.

No, this still looks like dirty lobbying to me.

oh come on

[DaveGod]

It's the most useless article ever. Absolutely nothing in it other than what barely amounts to a rumour without any details, juicy or otherwise.

News at 11: "industry lobbies government... some guy had a conversation with a government minister encouraging him to do pretty much what he eventually did, here's absolutely no details on the story because we have no evidence and we might be called out on it". They're even asking people not to speculate in the comments.

Personally, as a gamer and UK taxpayer, the UK games industry can go jump if they want my money from any route other than by me deciding their product is worth my purchase. They're all moaning about how unfair it is that they don't get a special subsidy and instead have to be treated like everyone else. And industry moans about the gamers' entitlement culture?

I can't even remember UK having any "cultural" influence on gaming since... Before my time I guess, everything I can think of has a distinctly American slant, even the Bullfrog stuff. Even the "American" stuff is really just generic plus American accents in the voice overs.

Tea Party of the digital age.

[Anonymous Coward]

Just like the original Tea Party was to protest tax CUTS (for foreign nations), which would have made the selling of home grown tea in the Americas unprofitable.

Just a comparison to history.

LV outlet & lv purses & louis vuitton bags

[Anonymous Coward]

Monogram Canvas & cheap damier Canvas Monogram Denim & cheap louis vuitton Monogram Denim Monogram Mini Lin & cheap Louis Vitton Monogram Mini Lin Monogram Multicolore & cheap louis vuitton Monogram Multicolore Monogram Verni & cheap louis vuitton Monogram Verni Show Spring Summer 2009 & cheap louis vuitton spring summer 2009 Stephen Sprouse & cheap louis vuitton Stephen Sprouse Stephen Sprouse Collection & cheap louis vuitton Stephen Sprouse Collection Louis Vuitton Belts & cheap Louis Vuitton Belt bag charms & cheap louis vuitton bag charm louis vuitton Wallets & louis vuitton Small Leather Goods

UGG Boots Outlet,UGG Boots,Cheap UGG Boots On sale

[Anonymous Coward]

UGG Classic Tall Grey Boots | Women's Classic Tall Grey Boots,UGG Grey Boots Classic Tall,UGG 5815 Grey Boots Women's UGG Classic Tall Meberry Boots | UGG Classic Tall Meberry Boots,Women's Classic Tall Meberry Boots,UGG Meberry Boots 5815 Women's UGG Classic Tall Navy Boots | UGG Boots Classic Tall Navy,UGG 5815 Navy,UGG Boots Navy Classic Tall Women's UGG Classic Tall Pink Boots | UGG Classic Tall Boots Pink,Women's Classic Tall Pink 5815,UGG Boots 5815 Pink UGG Classic Tall Romantic Flower Boots | Women's UGG Classic Tall Romantic Flower Boots,Women's Classic Tall Romantic Flower Boots Women's UGG Classic Tall Sand Boots | UGG Classic Tall Boots Sand,UGG Boots 5815 Sand,Women's Classic Tall Sand 5815 Women's UGG Classic Tall Sunflower Boots | UGG 5815 Sunflower Boots,UGG Classic Tall Boots Sunflower,Women's Sunflower Boots 5815 Women's UGG Classic Tall Yellow Boots | UGG Classic Tall Boots Yellow,UGG Boots 5815 Yellow Ugg Classic Mini Black Boots 5854 | Women's Ugg Classic Mini Boots,Women's Classic Mini Black Boots

Re:Game companies should come to India instead

[MadKeithV]

Man are you guys going to be pissed when you get to program the cow level in the next Diablo....