No agreement on tax relief for UK computer games industry

Developers argue that tax relief would put UK on a par with Canada, where games industry is booming

MPs have failed to reach agreement on calls from the UK computer games industry for the coalition government to honour the last Labour administration's promise to introduce tax relief to match tax perks available in Canada and elsewhere.

The Commons Scottish Affairs Committee examined the plight of the industry on Tayside but admitted in a report following three months of hearings: "The committee is divided over the issue of tax relief for the industry and we are unlikely to come to a consensus on this issue."

Its position is complicated by the fact that Opposition MPs have a majority resulting from the Tories giving up one of their seats to enable the SNP to secure a place. This was done on the understanding the concession would not be used to embarrass the government.

The most both sides on the committee could agree was to urge the government to keep the possibility of introducing a specific tax relief under review.

The concern is alleged unfair competition from Canada, where the games industry does enjoy tax perks, with claims that this is at least partly responsible for its industry moving to third place in global rankings while the UK fell to sixth following the collapse of Realtime Worlds.

But some MPs said the decline was also due to skills shortages, the high cost of the UK IT workforce and a decline in innovation.