Newly appointed Culture Secretary Ben Bradshaw has hinted that UK videogame developers may be granted direct tax breaks. The revelation was made during a recent House of Commons debate. Bradshaw said that the government is “looking at introducing further tax breaks” for the games industry. Bradshaw’s comment was made in …
Why are the music and film industries getting tax breaks, and why does the computer game industry deserve one?
Actually, scratch that- the first one doesn't push the boundaries on anything except pointless litigation, and the limits pushed by the second are only a small subset of the technological and sociological boundaries pushed by computer games.
So aside from its position as a driver of change, improvement and the identification of limits (which is an important part of a civilised culture), why does the computer game industry deserve a tax break?
And as stagnant, far less relevant industries why do music and film get tax breaks?
The UK is known for creating some of the best programmers in the world. Courtesy of the Science of Cambridge Mk14, UK101, ZX80, ZX81, Oric, Acorn Atom etc. The computers we had as children that taught us the internals of microprocessors down to the deepest level which is why there are good games companies in the UK now.
Also "Doing it digitally" in Everyday Electronics taught kids what a 7400 does, and NE555 were play things in electronic kits creating many flashing LED effects.
Lots of IT professionals left after the IR35 tax penalties were introduced (thank you NuLabour). And order an NE555 nowadays and the MET's anti-terror squad will put you under surveillance.
Do you think a tax break will fix all the damage they did?
For many years, the cost of games development in the UK as opposed to other countries (Canada especially where tax incentives are huge) has been a huge turn-off for many studios. As such if you want to get into Games programming in this country you can pretty much forget it.
Why would they be interested in (if memory serves) quad 2-input NAND gate chips when they could be learning to fry and serve chips at one of our fine educational establishments? I mean you might fail to complete something or it might break- and that wouldn't be nice. You may even- shock horror- burn your fingers on a hot component.
I was horrified a few years ago to find that they didn't really go into much detail on the low-level stuff in computing science courses nowadays. I mean how is learning Java computing _science_?
Kids these days, etc etc...
Social engineering or posturing?
If a tax break can help the computer games industry it can help all industries. How about reducing tax rates across the board? Have the government not heard of the Laffer curve or are they pretending it doesn't exist because they have more to gain from a complicated tax system?
Think about it: a flat, low tax rate would probably generate just as much revenue and you'd save the cost of armies of civil servants and armies of tax accountants.
Alternatively, tax every industry differently and come up with all kinds of schemes and initiatives and you get to a) play at social engineering* by messing with incentives and price signals; b) make a political career out of pandering to special interest groups by giving them tax breaks; c) win friends and influence people by to doing the same and d) get lots of jobs for your friends by having entire government departments to manage everything.
* see also: Law of unintended consequences.