Tax hopes over video games report

7 February 2011 Last updated at 03:14 ET

Scotland's video games companies are hoping an influential report will back their calls for the industry to receive tax breaks.

Hi-tech firms claim tax aid would safeguard thousands of jobs and generate hundreds of millions of pounds of investment.

Scotland has a significant video games sector, in a market said to be worth �55bn worldwide.

The Scottish Affairs Committee report on the industry is due out on Monday.

Video games development is currently worth about �30m to the Scottish economy.

Jobs cut

Dundee plays a key part in the sector and is home to about 15 design companies.

But tough global competition saw the industry cut almost a fifth of its jobs in Scotland last year.

The industry was also dealt a blow last summer when the new chancellor, George Osborne, decided not to introduce tax breaks, sparking the inquiry by the Scottish Affairs Committee at Westminster.

The committee heard evidence last October and travelled to Dundee to visit the University of Abertay and two video games studios, as well as meeting industry representatives.

Continue reading the main story

"Start Quote

The Scottish games industry, and the UK games industry in general, are not competing on a level playing field"

End Quote Dr Richard Wilson

Industry leaders estimate it costs about �60m to develop a new game and claim that with other countries offering tax relief it is vital the UK government does the same.

Staff 'poached'

Scottish games developers are hoping MPs will press the Treasury to reconsider tax breaks.

Dr Richard Wilson, head of The Independent Games Developers Association (TIGA), said there had to be a strategy for growth.

He told BBC Radio Scotland's Good Morning Scotland programme: "The Scottish games industry, and the UK games industry in general, are not competing on a level playing field.

"Many of our competitors, like Canada, France and the US, offer tax breaks for games production, often at substantial levels, so the effect of that is that it is driving investment away from Scotland and away from the UK to these other jurisdictions."

Mr Wilson called on Westminster to create the environment to compete in a market it is estimated could expand to be worth �80bn a year globally.

He said the Canadian games industry had grown by 33% in the past two years, compared with a 10% contraction in the UK, and claimed talented Scottish staff were being "poached" by Canadian firms.

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