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Sony and Activision over UK tax breaks

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jammy2211 said:

 I believe the video game industry here in the UK has (one of) the highest contribution to the economy to total employees ratio. It's been one of the industries that continued to grow / show success over the years and suchlike, and the government is risking losing it with this. 

 As said, there is without a doubt a huge risk Bizarre, Rockstar, Sony Studios and all will simply move to Eastern Europe or Asia in the next 5 or so years, as it's just cheaper. Much much cheaper. Then our politicians will be scratching their heads when yet another contributor to our economy isn't contributing at all.

 Whether Tax-Reliefs is the best method / incentive the UK needs to do something to remain competitive in attracting what has been a successful industry to our country, and currently we're quite simply a far less attractive proposal. I can see this yet again being another UK industry lost to the global market in a decade or so.

well if that happens in the UK then it will happen in France, Germany and probably Japan too...



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Soleron said:

Oh, yes. That's why I hate the way news items of 'X company is moving manufacturing to Poland' are presented as if that was a terrible thing; a slight to British people; and something the government should interfere in to stop.

The real issue is that 1hr of unskilled labour costs tens of times more in the UK than abroad. Due to historical reasons, better workers' rights/protections here, and the high cost of goods. I'd like to see that equalise as the rest of the world adopts (roughly) our laws and rights.

You're getting ahead of me.

Now, part of the thing making the UK a suboptimal environment would be taxes, yes?



kowenicki said:
jammy2211 said:

 I believe the video game industry here in the UK has (one of) the highest contribution to the economy to total employees ratio. It's been one of the industries that continued to grow / show success over the years and suchlike, and the government is risking losing it with this. 

 As said, there is without a doubt a huge risk Bizarre, Rockstar, Sony Studios and all will simply move to Eastern Europe or Asia in the next 5 or so years, as it's just cheaper. Much much cheaper. Then our politicians will be scratching their heads when yet another contributor to our economy isn't contributing at all.

 Whether Tax-Reliefs is the best method / incentive the UK needs to do something to remain competitive in attracting what has been a successful industry to our country, and currently we're quite simply a far less attractive proposal. I can see this yet again being another UK industry lost to the global market in a decade or so.

well if that happens in the UK then it will happen in France, Germany and probably Japan too...

 I believe France has a Tax-Relief equivalent type incentive system in place? Although I believe Ubisoft is expanding to Canada so no doubt it's still better over there.

 But indeed it's very possible, and it'll be a shame what with our history of losing industry. I personally can't see a reason why we should expect it to stick around when it's simply cheaper elsewhere, and those coming through the education system to become games developers are typically young, with few ties to the UK and I'd imagine happy to take the employment in Canada, or Florida, or wherever else.

 To me it feels like the same lack of foresight that lost us a promising position in the Space industry in the 70s. Or the computing Industry... sigh.



Khuutra said:

Media Molecule being relocated to Vancouver would cost the UK a lot more money than MM paying lower taxes, and that's a pretty strong bargaining chip.

Hold on a second.

It is not that easy to just move a company to a different country.  Especially since we are talking about a developer.  The only thing that really makes MM who they are is the people who are working there.  If you try to relocate the company to a different country, you are going to lose many of the people who worked there.

Then what are you left with?  The original company will be a shell of its former self, and a bunch of talent available on the job market in the UK.  Either competing studios are going to pick those people up, or maybe those former employees start their own studio.  So you have simultaneously hurt your own position, and given yourself more competition.  Not a good move.



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I live in the UK and I would far prefer if the tax incentives were not scrapped.

I'm a hardcore Keynesian (and a socialist too) and I really think public spending shouldn't be cut now, but in about 18 months time




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theRepublic said:

Hold on a second.

It is not that easy to just move a company to a different country.  Especially since we are talking about a developer.  The only thing that really makes MM who they are is the people who are working there.  If you try to relocate the company to a different country, you are going to lose many of the people who worked there.

Then what are you left with?  The original company will be a shell of its former self, and a bunch of talent available on the job market in the UK.  Either competing studios are going to pick those people up, or maybe those former employees start their own studio.  So you have simultaneously hurt your own position, and given yourself more competition.  Not a good move.

I think that depends entirely on the incentives offered to the employees re: relocation, but you do make a very valid point.



Khuutra said:
theRepublic said:

Hold on a second.

It is not that easy to just move a company to a different country.  Especially since we are talking about a developer.  The only thing that really makes MM who they are is the people who are working there.  If you try to relocate the company to a different country, you are going to lose many of the people who worked there.

Then what are you left with?  The original company will be a shell of its former self, and a bunch of talent available on the job market in the UK.  Either competing studios are going to pick those people up, or maybe those former employees start their own studio.  So you have simultaneously hurt your own position, and given yourself more competition.  Not a good move.

I think that depends entirely on the incentives offered to the employees re: relocation, but you do make a very valid point.

I have a bit of experience with this.  My father had this happen twice.  Once he chose to go with the company, another time he chose to get a different job.  Both times he saw high turnover during the transition.  It doesn't even end after you have finished the move.  Employees decide they don't like the new environment, or new people and leave the company then.

This was just moving to different cities within the US.  It must be worse for international moves.



NNID: theRepublic -- Steam ID: theRepublic

Now Playing/Backlog:
Wii U - Currently Gaming Like It's 2014 (Hyrule Warriors) - 11 games in backlog
3DS - Currently Gaming Like It's 2013 (Luigi's Mansion: Dark Moon) - 7 games in backlog
PC - Currently Gaming Like It's 2012 (Borderlands 2) - 11 games in backlog
Mobile - The Simpson's Tapped Out and Yugioh Duel Links

Khuutra said:
Soleron said:
...

You're getting ahead of me.

Now, part of the thing making the UK a suboptimal environment would be taxes, yes?

Right now? Yes. We have (by a small margin) higher corporation tax than most other EU countries.

But the government is planning to cut that - the Budget within the last month means that we will have the lowest corporation tax in the EU in 3 years. It will be incrementally cut over that time.

They have replaced the idea of video game company tax cuts (which are specific) with a general cut to all corporation tax to bring it in line with the rest of the EU. That's an improved position the way I see it.



Soleron said:

Right now? Yes. We have (by a small margin) higher corporation tax than most other EU countries.

But the government is planning to cut that - the Budget within the last month means that we will have the lowest corporation tax in the EU in 3 years. It will be incrementally cut over that time.

They have replaced the idea of video game company tax cuts (which are specific) with a general cut to all corporation tax to bring it in line with the rest of the EU. That's an improved position the way I see it.

Granted, though I'm going to feel like a heel if you said this earlier and I just missed it.



Khuutra said:
Soleron said:
...

Granted, though I'm going to feel like a heel if you said this earlier and I just missed it.


No, I didn't. I thought that was a great argument.