


UK Video Game Tax Cuts Sabotaged? 123
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."
Doesn't say who the game company is (Score:1)
Re: (Score:3, Insightful)
Re:Doesn't say who the game company is (Score:4, Interesting)
Re: (Score:1)
Re: (Score:3, Informative)
Re: (Score:1)
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: (Score:1)
Impossible! Everyone loves shooting zombies, even if not as much as the British.
Re: (Score:2)
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 (Score:4, Insightful)
Re:Doesn't say who the game company is (Score:4, Funny)
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 [kotaku.com]
Re:Doesn't say who the game company is (Score:4, Interesting)
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: (Score:2, Insightful)
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 c
Re: (Score:1, Informative)
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: (Score:1)
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 th
Re: (Score:2)
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
Re: (Score:2)
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
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Would some 2 bit animated comic book set to music cubic sweatshop
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.
disadvantage..? (Score:4, Insightful)
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: (Score:2)
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? (Score:2, Insightful)
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? (Score:4, Insightful)
Re: (Score:2, Insightful)
Do you think the UK treasury can run numbers? You're borrowing £500,000,000 per day for goodness sake!
Re: (Score:2)
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.
The EU competition commission? (Score:2)
Re: (Score:2)
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
And the other half of the story... (Score:5, Informative)
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 [nytimes.com]
Re: (Score:2)
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: (Score:2)
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
Re: (Score:2)
Re:And the other half of the story... (Score:5, Funny)
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: (Score:2)
Re: (Score:2, Insightful)
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... (Score:4, Insightful)
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: (Score:1)
Seriously? That one was high school economics.
Re: (Score:2)
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 muc
Re: (Score:2)
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, fo
Re: (Score:2)
- 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
Re: (Score:1)
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: (Score:1)
Re: (Score:2)
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 com
Re: (Score:3, Informative)
O RLY?
http://www.mcvuk.com/news/38468/No-game-tax-breaks-in-Tory-manifesto [mcvuk.com]
http://www.guardian.co.uk/media/2010/apr/12/labour-manifesto-libel-legislation [guardian.co.uk]
Re: (Score:3, Interesting)
http://www.develop-online.net/news/34341/Tories-come-clean-Well-offer-tax-cuts-in-first-budget [develop-online.net]
http://www.computerandvideogames.com/article.php?id=244938 [computeran...ogames.com]
Re: (Score:2)
Neither of those is a manifesto pledge, cellar dweller.
Re: (Score:2)
Re: (Score:2)
Unless you want to rewrite it for me?
Re: (Score:2)
Re: (Score:2)
Then report it to an admin as spam and stop wasting everyone's time
We did give them a tax cut! (Score:5, Informative)
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! (Score:5, Insightful)
UK Weather is a BONUS for IT (Score:5, Funny)
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: (Score:2)
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 [bbc.co.uk]. Current observations at 11:00: completely clear sky, 23'C, 3 km/h wind.
Re: (Score:2)
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: (Score:2)
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 [builditsolar.com], 56 degrees [builditsolar.com] 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: (Score:2)
Re: (Score:2)
(Use the 32 degree [builditsolar.com] table if you prefer.)
Climate and weather in a particular area is more than just sunshine.
Re: (Score:3, Funny)
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: (Score:1)
Re:We did give them a tax cut! (Score:4, Funny)
Re: (Score:2)
Depends where you're standing as to whether it's Western or not, but it's 10% in Macedonia.
Doesn't name nay names (Score:2, Interesting)
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 advan
Re: (Score:2)
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: (Score:2)
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
Re: (Score:2)
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: (Score:1)
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 (Score:1, Troll)
Re:Well we always knew (Score:4, Insightful)
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: (Score:2)
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.
You should be modded informative (Score:2)
Re: (Score:2)
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? (Score:4, Insightful)
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? (Score:5, Informative)
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: (Score:2)
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:
Re: (Score:2)
Wait... (Score:2, Interesting)
"...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: (Score:3, Insightful)
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: (Score:2)
Which taxes are increasing in the US, exactly? The economic stimulus involved hundreds of billions of dollars of tax cuts [politifact.com].
Videogames on the UK. (Score:3, Insightful)
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: (Score:1, Funny)
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 [wikipedia.org] they went through, followed by some rather violent delusions of grandeur [wikipedia.org], and the fact that they are now a certifiable workaholic with at least one recent fairly bout of burnout [wikipedia.org].;)
Who could have? (Score:2)
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
Seriously? (Score:3, Insightful)
Quid Pro Quo (Score:2)
So what was given in return for 86'ing the tax incentives, hmmm?
oh come on (Score:2)
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 U
Re:Game companies should come to India instead (Score:5, Insightful)
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: (Score:2)
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: (Score:2)
FTFY.
Re: (Score:1, Funny)
Re:Game companies should come to India instead (Score:4, Interesting)
Re: (Score:1, Funny)
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
Re: (Score:1)
And this is why democracy sucks (Score:3, Insightful)
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, i
Re: (Score:2)
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: (Score:2)
Re: (Score:2)
...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..