LABOUR PARTY FAIL SCOTLAND’S GROWTH GAMES INDUSTRY

LABOUR PARTY FAIL SCOTLAND’S GROWTH GAMES INDUSTRY

NO TAX BREAK FOR GAMES INDUSTRY - PATENT TAX CHANGE DELAYED UNTIL 2013

SNP MSP Joe FitzPatrick has hit out after the Labour Government ignored pleas from Scotland’s Computer Games industry for tax breaks to keep them at the forefront of economic growth.

The tax break could have delivered 700 new jobs in Scotland’s Games industry. Instead 400 jobs and over £200 million in receipts could be at risk, according to industry body TIGA.

The Dundee West MSP has campaigned alongside Scotland and Dundee’s computer games industry for upfront tax breaks for Research and Development.

Instead of backing investment in Research and Development as in France and Canada the Labour Government is refusing to offer companies any support until 2013 and only then, once a product has been developed and patented.

Mr FitzPatrick, who joined Scotland’s Culture Minister in announcing financial support for the Games industry on Monday said:

“Dundee will be deeply disappointed by Labour’s failure to listen to the industry’s pleas.

“Scotland’s Games industry is a key growth area for our future. We are world leaders in the games industry but our position and our jobs are now under threat. Even the proposed cut in tax on profits from patents is of little use as games do not often get patents.

“There is a real risk that Scotland’s leading games companies could move to other countries if they do not get the support they need from the Treasury. Today has been a real let down for Dundee and Scotland’s games sector.”

Commenting on the creation of a “patent box” tax break which will reduce taxes for companies profiting from patents Mr FitzPatrick said:

“The cut in corporate tax on patented developments is welcome, but the wait till 2013 is too long. There is no guarantee this tax cut will ever be introduced and this uncertainty risks leaving our innovative industries in limbo.

“Recent UK announcements of investment in life sciences and computer games are welcome, but they look increasingly like they have been timed to hide Labour’s failure to fix the tax system to favour these industries as soon as possible.”

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A report produced by TIGA, the Games Association reveals that the tax break could mean:

Scotland could lose 400 jobs - failure by the UK Government to implement the tax breaks could lead to the loss of 200 Jobs in Dundee over the next 5 years.

Tax incentives would have created 700 Jobs in Scotland - introducing tax incentives would create 700 Graduate level Jobs and £90 million of extra investment in Dundee over the next 5 years.

Games Tax Relief would pay for itself - Over five years the tax measure would cost an estimated £192 million but would deliver £415 million in tax receipts.