When a publisher leaves a studio high and dry in the United Kingdom, industry trade body Tiga thinks that such abandoned projects should be eligible for tax relief. Tiga CEO Richard Wilson said that publishers have in the past left some studios in the UK “high and dry” by demanding large development teams for extended periods to then cancel a project with little or no notice at all.
What Tiga is proposing would be similar to what is currently done for unreleased films. Wilson thinks that unreleased games should benefit from that same tax relief as long as they pass the cultural test and were demonstrably intended for release. Tiga also mentioned its own 2011 research which found that 22 percent of developers in the UK had their games cancelled by publishers prior to completion.
"Some publishers have been known to leave studios high and dry by obliging them to maintain teams of developers for months on end, only for them to finally cancel projects. This can have damaging repercussions for the studios in question,” said Wilson.
"Just as some expenditure on unreleased films qualifies for film tax relief, so cancelled game projects should in principle be eligible for games tax relief. This is consistent, fair and reasonable. Provided that the game in question would pass the cultural test and is demonstrably intended for release then it should in principle be eligible for games tax relief.”
"Games tax relief is designed partly to promote the creation of new content," Tiga Chairman and Rebellion CEO Jason Kingsley added. "By enabling developers to claim relief on cancelled projects, the viability of studios will be enhanced. Studios will have more confidence to develop and pitch new IP to external publishers, or experiment with more direct to consumer business models."
"TIGA will be contacting Government officials to emphasise these issues and to seek clarity of guidance on these points.”
UK games tax relief is expected to be available across the country to developers beginning April 1.