A new report from NESTA (National Endowment for Science Technology and the Arts) has highlighted the growing challenges that the UK games development sector faces in an era of growing globalisation, with comparative analysis of incentives in different jurisdictions for performing research and development with an indication that the UK will slip from 3rd to 5th place in the next 2 years and proposes simplifying the R&D tax relief system.

Their research shows that formal measures that have been implemented in the UK to promote innovation such as Research & Development tax credits are stifled by:

1. Creativity and innovation occurring throughout the entire development cycle

2. Separating R&D activities from other costs

3. The opportunity costs of applying for R&D tax credits exceed the potential benefits.

Our view: The software games industry has shown itself over the past 30 years to be a key innovator and frequently advances technology to produce the latest and greatest games. There is no reason why, under the existing scheme, R&D taking place throughout the entire development lifecycle cannot be claimed for -  whether this is the core development team, artists or other creative staff whose work is necessary for the technological success of an R&D project. We have  extensive experience in identifying R&D for games studios and visual effects studios where this is the norm.